Annual Investment Allowance (First Year Sole Trader)

[branney]

I started a business in October 2012 and bought equipment in January 2013 (£2500) and June 2013 (£1000).

I had originally planned to finish my tax year on 5th April 2013, to keep things simple for DIY return.

Am I correct in thinking the following:
(i) Anything under the current AIA of £25,000 is 100% allowed to be claimed against tax;
(ii) exception to (i) certain items which go in their own pools;
(iii) exception to (ii) some energy efficient items can be claimed 100% against tax in the first year only

Source: hmrc.gov.uk
/capital-allowances/plant.htm

I had been rather confused, thinking I would have to select my first accounting date to make the equipment all fall in the first year. But now that I have looked again, and my equipment is not subject to a separate asset pool, it seems I will be allowed roughly 6/12 of the £25,000 allowance to 5th April 2013 and 12/12 of the £25,000 allowance the following (full) year?

As I made a loss to 5th April 2013, this means I would be due tax back from my PAYE tax paid for that year?

 

[branney]

PS - I did do a search to see if I could find an answer on here. Not sure if that is why I got no replies, or is it just the subject matter, or is it the fact I posted in the middle of the night?

I do have one other question. I bought some stuff which I was toying with selling and ended up using myself. It is on the same receipt as the equipment. As long as I don't claim that as an expense am I OK, or should I claim it then 'sell' it to myself?

 

[Scalloway]

You can set a loss against PAYE income. More information here

http://www.hmrc.gov.uk/helpsheets/hs227.pdf

 

[branney]

For business startup receipts from before the official start date, how many months back can I go?

 

[Scalloway]

You can claim pre trading expenses that were incurred up to 7 years prior to trading, provided they were wholly and exclusively for the business.