If an asset is bought mid way through accounting year does it have to be prorated on the WDA allowance?
Also can loan repayments be included in business expenses?
Many thanks
Writing Down Allowances are time apportioned based on length of accounting period (#1). before looking at the WDA pools do you have enough Annual Investment Allowance remaining for this? (AIA is also time apportioned on the amount of AIA available).
You don't have to use the AIA but it would be remiss of me not to mention it.
On the seperate point about the loan repayments there wil be two elements to it. The repayment of the loan which as Jo says is purely a balance sheet entry but also a finance cost element to the repayment which is an expense.
Unlike the depreciation the finance costs will not be added back to the profit. Sure that I didn't need to add that last bit but you never know who else might read this.
kindest regards,
Shaun.
#1 the only capital allowance that is not time apportioned by accounting period is FYA (first year allowances. AIA and WDA must always be time apportioned).
p.s. edited. I had misread the question. Sorry, Matt is completely right below in relation to apportionment of AIA/FYA
-- Edited by Shamus on Tuesday 5th of January 2016 10:57:19 PM
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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.
The WDA is for s/hand car so is a special rate pool of 8% as over emissions, so I am to pro rota this?
Also I can claim the interest on the loan to purchase the car as a business expense?
If a private use car always keep seperate from the pools
Once calculated adjust the calculation for any private use.
For the accounts capital repayments through balance sheet, finance costs through expenses, unless the finance costs were capitalised as part of the asset in which case everything through the balance sheet.
The above answer assumes that
a) this is for self employment, not an incorporated entity.
b) That this is definitely a car, not a van.
kindest 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.
No private use, this is purely for business use for self employed taxi driver. Second hand car was purchased in July and accounts run April to March so will calculate on 9 months pro rota.
Thanks
Sorry I disagree with this. The AIA is apportioned if the accounting period is more or less than 12 months or if the rate available changes within a period. The asset is apportioned if there is any private use.
The date at which the asset was purchased in the year wouldn't affect the amount of AIA available.
-- Edited by Shamus on Tuesday 5th of January 2016 10:58:38 PM
Yes I have previously included this on another post but I read that WDA did not need to be prorated so was interested on gaining general opinions.
Sorry if this is not permitted on the forum!
Oh no that's ok Lisa, it was just the bit about the taxi that I recalled. I meant to ask earlier if this was the same scenario or about just cars in general.....started a response then got sidetracked with work, and have now noticed that you've mentioned the taxi since, so Shaun is aware as he answers.
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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
Matt is correct, I had misread the original question re apportionment. Eroneous lines now removed from thread.
Sorry all. obviously time to back away from the PC for the evening.
(the rest of my response stands though).
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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.
Easy done! Step away from the PC. Time for rest and sleep. Me I mean, after only about 3 hours last night. Sounds like you are the same Shaun, although 23.11 would be an early night for you and not like your usual 2.20am posts!!!!
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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
seems like its every night at the moment and its not even as if the bulk of it is self assessment stuff.
Had an epic the other day where I was so engrossed in an Excel issue that I only realised that it must be time for bed as it was getting light outside!
Time for a few early one's I think before things get seriously manic later this month.
Night all
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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.
What self assessment, I'm on a crazy VAT slog and it will be right up to the wire! Not helped by one clients problems being unable to access sage for three weeks/them having no bookkeeper for weeks/second hand scheme being done wrong and me initially being told VAT period end was December when in fact it's November!!!! Never mind the other clients. Oh and me thinking 7th was Friday!!!! Oops.
You and the love of your life staying up til dawn again hey Shaun. I mean you and excel!!!
Same here John......I really should be avoiding BKN altogether this week, but it's a bit of light relief in the midst of VAT mania. Oh well, back to it.
__________________
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
