I just want to make sure that my understanding is still correct, as HMRC website is not clear on this subject.
My client can claim around £2500 AIA and about £300 WDA, however, the taxable profit is only £10,800. Am I correct in thinking that you can defer claiming the AIA and put the £2500 into the pool account and claim 18% per year in future years when profits may be higher?
What if their profit is low again in the future, can the WDA not be claimed and just leave the pool as it is?
Can I assume that the client is self employed and is worried about losing their personal allowance?
The word defer AIA is a bit of a misnomer there as if it is not used in the period where the asset is acquired then it is lost forever. It cannot be deferred as such. That said, as you say it looks from the figures supplied that it would be wasted anyway so to use it would be throwing money away.
You do not say what the assets are so I assume that they should be in the general (18%) rather than special rate (8%) pool.
Capital allowances up to the amount allowable for a period can be taken either in whole or part with whatever is not taken simply left on the value of the asset.
The following period you can still go no higher than 18% (general pool) for that period unless the debt has reduced to the point where it can be tyransferred to the small claims pool in which case 100% write off is allowable in that year (to qualify the balance of the general and/or special rate pool must be less than or equal to £1000 directly before the calculation of the WDA).
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Ive found the website quite helpful, although as ever you end up opening links and wandering off down different pages and threads. They do run some good webinars on Capital allowances for the s/employed - all for free and you can ask as many Qs as you want - might be something to try Lyndsey?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
