CARS in the capital allowances computation

Londina
Londina Registered Posts: 814 Epic contributor 🐘
in AAT Level 4 (Level 8 in Scotland)
This is so confusing, if there is car of £10000 in the opening balances for capital allowances together with a general pool of £52000, where do you put the car value, add with the general pool (62000£) or a separate column?
some examples shows one thing, some another!

Please help, thanks in advance!

Comments

  • Bookworm55
    Bookworm55 Registered Posts: 479 Dedicated contributor 🦉
    Expensive cars have their allowances worked out seperately from the general pool. This is because their writing-down allowance is capped at £3,000 pa regardless of the actual cost of the car.

    Expensive cars are defined as having a cost price in excess of £12,000. If your car has a cost price less than this, you can (I believe) put it in the general pool. (Because it's 25% writing-down allowance will be less than £3,000)

    Is that £10,000 the cost or the written down value? If the cost, I'd probably put it in the general pool. If it's the written down value, keep it in its own column.
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
    Bookworm55 wrote: »
    Is that £10,000 the cost or the written down value? If the cost, I'd probably put it in the general pool. If it's the written down value, keep it in its own column.

    it was the writtend down value of the previous year, therefore it was an expensive car previously and have to remain in a separate column!
    thanks a lot for the clarification!
  • Moseley_21
    Moseley_21 Registered Posts: 59 Regular contributor ⭐
    Yes i agree - any car over £12,000 goes in an expensive car column in order to cap the WDA at £3,000 and car under this value goes in the general pool along with any sales from the disposal. When the expensive car is sold no WDA is available in the last year, the remainder from (balance-sale) goes to capital allowances via a balancing charge as there is no longer an asset in that column.
  • hanapospis
    hanapospis Registered Posts: 111 Dedicated contributor 🦉
    If a new car cost 11.000 but has some private usage - will this go to the new special pool?
  • Moseley_21
    Moseley_21 Registered Posts: 59 Regular contributor ⭐
    Yes that is what i have been doing in my practise questions... it seems the most logical way forward??

    Simon
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
    Industrial buildings

    what about Industrial Buildings and IBA, does it have the same layout of computation for plant and machinery?
    I mean, does it have a general pool too since so far I only see simple calculation as: Building £155000 x WDA 3% = £4650 IBA. That's it?
    What about when a company buys at the same time a machinery and warehouse, there are two separate computation for the capital allowances? :confused1:
  • hanapospis
    hanapospis Registered Posts: 111 Dedicated contributor 🦉
    "Industrial Building allowance is a capital allowance that is being phased out over the next few years. Since it is currently subject to transitional rules, it will no longer be examined by the AAT"

    you do not need to worry about Industrial Building allowance :thumbup1:
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
    hanapospis wrote: »
    "Since it is currently subject to transitional rules, it will no longer be examined by the AAT"

    you do not need to worry about Industrial Building allowance :thumbup1:

    that's a good news for a change! :lol::laugh:
  • Bookworm55
    Bookworm55 Registered Posts: 479 Dedicated contributor 🦉
    That's a good point. A lot of things changed, particularly between the 2007/08 and 2008/09 tax years. Which is your exam based on? Or is it 2009/10 already?
  • Moseley_21
    Moseley_21 Registered Posts: 59 Regular contributor ⭐
    It's based on the 2008/09 tax year mate.. must be a bit confusing if you work in practise and already deal with rules in place for the current tax year.
  • cathyncc
    cathyncc Registered Posts: 3 New contributor 🐸
    Iba

    Hi guys,

    Is it definite that IBA isn't in the exam? Apparently people who went on the recent BTC revision course run by the AAT in London were told that it is still examinable?
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
    cathyncc wrote: »
    Hi guys,

    Is it definite that IBA isn't in the exam? Apparently people who went on the recent BTC revision course run by the AAT in London were told that it is still examinable?

    I was there too and actually we did exercises with IBA, don't remember if then tutor said it will not be examinable..
  • hanapospis
    hanapospis Registered Posts: 111 Dedicated contributor 🦉
    I am studying from osborne books and there is stated that it will not be examined.. I am not studying ( I can't) it as it is not in my book at all.:crying:
  • Gem7321
    Gem7321 Registered Posts: 1,438 Beyond epic contributor 🧙‍♂️
    I think it's strange that they wouldn't assess it seeing as IBA is still in place for another couple of years. Maybe someone should contact student services and find out for sure?
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
    hanapospis wrote: »
    I am studying from osborne books and there is stated that it will not be examined.. I am not studying ( I can't) it as it is not in my book at all.:crying:

    it's not in your book, but it's in every past BTC paper I'm doing, check it there, the calculation at the end of the day is quite easy, not like plant & machinery:thumbdown:
  • Richard
    Richard Registered Posts: 373 Dedicated contributor 🦉
    Gem7321 wrote: »
    I think it's strange that they wouldn't assess it seeing as IBA is still in place for another couple of years. Maybe someone should contact student services and find out for sure?

    I contacted Student Services and was told that it is still assessable, but that there will be little emphasis on it due to it being phased out. They also said to concentrate on the more important tax issues.

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