Sorry if this is against the forum rules, but I am looking for some guidance.
I am a Sole Trader (not VAT registered) using Quickbooks 2013, trying to finish my 2013/2014 Tax Return
After all my allowable expenses I have a Net Profit of £21,300.
Over the course of the that tax period I have brought the following for business use (not included in above) Ford Transit Van - £6200 Computer/Laptop - £900 Tools and testing equipment - £1900
From my understanding I can claim 100% of these items as Annual Investment Allowance (Please correct me if I'm wrong) This would make the total taxable £12,300
The problem I am having is how I should enter/record/show these purchases in Quickbooks? Or should these capital allowance purchases be kept separately from Quickbooks?
AIA is claimed on your tax return. You would record depreciation as normal through your books. You need to record the purchase of the assets in QB if you haven't already, these will appear as debits in the Balance Sheet. Then you would depreciate by debiting depreciation in the P & L and crediting in the Balance Sheet (thus reducing the book value of the asset to reflect the use of the asset). It's quite confusing but as depreciation isn't tax allowable it gets added back to the profit and the capital allowances/AIA gets claimed instead.
