Capital allowance 2 questions

[xJustmyluckx]

Hi i'm looking for advice on capital allowances. I'm a small business.

1st question. My accountant used the items bought under capital allowance on the basis of 40% FYA, and then when the AIA was introduced it was to be changed to 10% per year and there was a balance in the pool of approx £5000. However most of the items bought such as computers and repair machine have all broken and some of the items were second hand fixtures and fittings which have all been replaced.
is there anyway of claiming the outstanding amounts of cpa without waiting and doing it @ 10% per year? or would they have had to been done as depreciation items? Could they be changed?

2nd question. If we had a car at £6200 and claimed fya 20% then traded in and got a new one with £4960 left unclaimed and a £2000 trade in value does that mean we get to claim the £2960 difference cpa the year we exchanged cars?

I know it might sound like I'm not very bright lol but I just want it right in my head before i speak to accountant.
Thanks

 

[Rolo Tomasi]

The balance on the pool of capital allowances can not be written off until its value is less than £1,000 or your business ceases.

With regards to the car, the only way you can claim the balancing allowance would be if the vehicle was not pooled with other vehicles. This is usually the case if you are a sole trader and there is some private use of the car.

 

[AccountancyStudent]

10% is the capital allowances rate for the special rate pool - you are not allowed to claim FYA on the special rate pool (though I don't see why computers would be in this pool)

You are also supposed to claim AIA before FYA - so assuming year 2009/10 (as you mention 40% FYA) you had £50000 of AIA to allocate against the fixtures etc. so I am assuming you could have used it all (unless it was used up against other assets?)

for assets with a life <5 years you can claim a depooling election to put them in their own pool and then a balancing charge/allowance will arise earlier on them - for sole traders you need to claim by 12m after 31 Jan following the period of account in which the expenditure occurred

You are not allowed to claim FYA on Cars - as you mention 20% I assume you claimed WDA (Writing down allowance)

If the car is in the main pool - just deduct the part exchange value from the main pool and claim WDAs as normal in future years

If it was in its own pool (i.e. car with private usage) - then you will have

TWDV b/f 4960
Less disposal (2000)
Balancing allowance 2960

The balancing allowance can be added to your capital allowance for the period of account


However the value of the new car brought in will be cash value + p/ex value

(NB: I'm just a student - someone else should check this)

 

[xJustmyluckx]

ok car is used partial for private use so assume that means i can claim the balance in capital allowance now then.
the fixtures, comps etc were put in 06-07 (08 return) 40% fya and then reduced to wda 10% in 07-08 when they were done for (09 return) due to AIA being brought in. I am assuming it is 10% now for the next x amount of years till like previous post said they are less than £1000? it just that it means will take another 8 years to claim even though we have none of the items anymore due to being scrapped seemed a bit long?

 

[David Griffiths]

I would expect computers and the like to be in the 20% pool, not the 10% pool which is generally for high emissions cars and integral buildings features.

The fact that the items no longer exist is not relevant. In such cases you should consider making an election for short life assets, enabling you to write them off when disposed of or scrapped