Closing down as a Sole Trader

[David I]

I am due to retire after ten years as sole trader, during those years I have purchased items under the AIA. Some of these items no longer exist and the remainder have been subject to considerable wear and tear examples being tools and an old van purchased at the start of trading.

I intend to keep these items for personal use and I am unsure as to how to account for them on my final tax return.

Is it simply matter of estimating the secondhand value and declaring this value as items disposed of in box SEF3 of my final tax return?

If so do these items need itemising or will a total figure suffice?

 

[Scalloway]

Is it simply matter of estimating the secondhand value and declaring this value as items disposed of in box SEF3 of my final tax return?

That would be ok

If so do these items need itemising or will a total figure suffice?

You only need to enter a total in your self assessment but I would keep a list just in case HMRC make enquiries.

 

[SteveHa]

Note that if you've claimed 100% AIA previously a balancing charge will arise on the disposal value.

 

[David I]

Note that if you've claimed 100% AIA previously a balancing charge will arise on the disposal value.

Yes the van was at 100%, what is a balancing charge?

 

[SteveHa]

If you've written of the whole cost of an asset against tax, and subsequently dispose of the asset at a value greater than £0 you give rise to a tax charge (effectively repayment of tax relief received) on the later disposal value since this is no longer a cost incurred.

Have a read at https://www.gov.uk/capital-allowances-sell-asset

 

[David I]

I think I get it but not sure, I feeling a bit stupid to tell the truth.
The van cost £2500 ten years ago for which I claimed 100% and the valuation I have for it is £400.
So is that £400 a balancing charge and if so where is it declared on the form?

Under Vehicles and Equipment I can see "Total Balancing charges- where you have disposed of items for more that their value", but I am disposing of them for their value.
This is a very confusing.

All I am trying do is tell HMRC that I am keeping items for which I have claimed AIA on.
A van bought for £2500 and valued at £400 for which 100% was claimed.
Tools under which were bought for about £1800 under AIA which now have an estimated value of £450.

Sorry for being a pest.

 

[Scalloway]

Put the total of the estimated value in Box 26 - Total balancing charges – for example, where you have disposed of items for more than their tax value.

 

[David I]

Next silly question, how do I know the tax value?

 

[Scalloway]

The tax value is the value that is being written down for tax, in your case £0.00 as you claimed the full amount for AIA.

 

[David I]

Many thanks all.
It has sunk in at last