Business Tax BPP Books question

SLM

Looking for someone to help here.

Question 1.1 on Practice Exam 3 - I correctly calculated the AIA and FYA on the plant and motor van additions. What I dont understand is why isnt WDA at 20% calculated on the £2000 that is transferred to the pool? The book clearly states "WDA is calculated on the value of the pooled plant after adding current period additions". Am I missing something???

meibaker

hi, only acquisition do not qualify 40% FRA, it will be then transfer to main pool after AIA, and WDA20% will be charged.

Bluewednesday

I haven't got the question but wonder if you are adding the balance after the FYA and then calculating the WDA?

The book means any current period additions that do not qualify for AIA or FYA. The balance of those items are added to the pool after the WDA has been calculated.

Is that what you mean?

meibaker

Bluewednesday wrote: »

I haven't got the question but wonder if you are adding the balance after the FYA and then calculating the WDA?

The book means any current period additions that do not qualify for AIA or FYA. The balance of those items are added to the pool after the WDA has been calculated.

Is that what you mean?

hi bluewednesday, you are right!
i should say any acquisition except cars, are not qualified for FRA, will be transfer to main pool and WDA will be chargered! sorry to confused you more!

SLM

Well I had the additions totalling 70,000, AIA was 66,667 as it was a 16 month period, then a further 1,333 for FYA, leaving a balance to be transferred to the pool of 2,000. Do we not then add this to the pool AND THEN calculate WDA at 20% (adjusted for a 16 month period)??? Its just the answer doesnt calculate any WDA?

meibaker

because £3,333 is qualified the 40% FRA,the figure £2.000 will just transfer to main pool, if for example, the £3,333 is not qualified for FRA, and then £3,333 will be transfer to main pool and WDA20% will be charged.

Bluewednesday

SLM wrote: »

Well I had the additions totalling 70,000, AIA was 66,667 as it was a 16 month period, then a further 1,333 for FYA, leaving a balance to be transferred to the pool of 2,000. Do we not then add this to the pool AND THEN calculate WDA at 20% (adjusted for a 16 month period)??? Its just the answer doesnt calculate any WDA?

You can't have FYA and WDA on the same additions in the same period

A-Vic

i HOPE THIS WORKS

SLM

Bluewednesday wrote: »

You can't have FYA and WDA on the same additions in the same period

Thankyou. That was the simplest way to undersatnd it!