Deferred tax question
Monsoon
Registered Posts: 4,020 Beyond epic contributor 🧙♂️
When calculating the deferred tax in relation to AIA:
If you have some capital assets on which you are claiming depreciation but no capital allowances are claimable (eg a drainage system which is disallowable CA22010)...
Does the value (cost minus zero capital allowace/AIA) form part of the tax written down value for the deferred tax calucultion? Or do you omit it? I.e. do you pool it and just never take an allowance?
I would have thought you'd have to include it, as otherwise you aren't comparing like with like.
Also can I dobble check which is the debit and which the credit?
I presume it's a debit in the P&L where tax relief is obtained quicker than the depreciation rate?
Thank you
If you have some capital assets on which you are claiming depreciation but no capital allowances are claimable (eg a drainage system which is disallowable CA22010)...
Does the value (cost minus zero capital allowace/AIA) form part of the tax written down value for the deferred tax calucultion? Or do you omit it? I.e. do you pool it and just never take an allowance?
I would have thought you'd have to include it, as otherwise you aren't comparing like with like.
Also can I dobble check which is the debit and which the credit?
I presume it's a debit in the P&L where tax relief is obtained quicker than the depreciation rate?
Thank you
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Thanks Jay.
Yeah that makes sense now - omit the asset from both parts of the calcuation as the tax treatment isn't going to change.0