Not sure if this is an incomprehensible ramble, or some sort of coherent question, as I want to ask something, but can't think of the right question? . I think it's because all the numbers are so tiny that I'm bewildered!
I'm doing a 2013/14 tax return* and want to be clear about claiming AIA. It's on a £1,074 camera for business use. The adjusted profit before Capital Allowances is only £653. So if I claim the full AIA she will make a loss. She may well make a loss in 2014/15 anyway, and I doubt if she will make enough profit to pay much, if any, tax for a few years.
You can only claim AIA in the period you bought the item.
.......
If you dont want to claim the full cost, eg you have low profits, you can claim part of the cost as AIA and part using writing down allowances. You can do this at any time as long as you still own the item.
The first sentence is very clear that you can only claim AIA in the first year, but the last sentence could be read as you can claim AIA in future years if you have low profits.
I'm inclined to claim enough AIA to give £0 profit, rather than the full amount and make a loss, so she has slightly better looking profits in future years when the benefits system turns really nasty, but without complicating things by carrying forward losses. I think she's going to have big problems with the changes to Working Tax Credit in 2015/16, and even worse problems with Universal Credit, although as that's done on a cash basis presumably it won't make any difference.
She's spent around £800 on camera lenses in 2014/15 that I'll have to decide how to deal with too, depending on whether she makes a loss.
Can anyone give me a useful answer or helpful suggestions, or have I bewildered you as much as I've bewildered myself???
*It's not late, as the naughty client hadn't told the taxman she was self-employed until late December, and the return has to be in by the end of this month!
EPF_Solutions wrote:......................and part using writing down allowances. You can do this at any time as long as you still own the item.
The first sentence is very clear that you can only claim AIA in the first year, but the last sentence could be read as you can claim AIA in future years if you have low profits.
Hi, I think you may be missing that the WDA rate will usually be 18% on the £421 balance after you've reduced your client's profits to zero.
Try going to your above link, scroll down and click the 'percentage rate' link and have a read on short life assets especially if you think there may be an element of private use.
. I think it's because all the numbers are so tiny that I'm bewildered!
