BTC June 2010 revision challenge(1)

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MichaelBeechFMAAT
MichaelBeechFMAAT Registered Posts: 16 New contributor 🐸
Hi

Hope revision going good for fellow aat folks

first of two questions as a challenge - I will post the answers later, unless someone beats me to the punch!

Corrective Measures ltd have sorted out a set of figures for period 1.3.2009 to 30.6.2010
The amended and adjusted profit shows a figure of £460,000, prior to any accounting for capital allowances for the whole 16 mth period

Plant and Machinery cap allowances for year ending 28.2.2009 CAP detailed brought forward written down amounts of

Expensive car (Mondeo) £16k
Main pool £61k

During the 16 month period items came and went. As below:

November 2009 Acquisition of a used BMW for £14k
December 2009 Disposal of plant for £5k (originally cost £29k)
April 2010 Bought plant costing £23K
May 2010 Disposed of the Mondeo for £5k (it had cost £19K)

Who can:

(i) give the CAPS that will be applicable (ii) Sort out the Plant and Machinery capital allowances for both CAPS and any other Cap Allowances
(iii) Assess and calculate trading income for each CAP

?
Michael Beech FMAAT CIMA Dip MA
Co -Director AM-Accounting & Business Advisors Ltd
Director, MSBeech Enterprises Ltd t/a Michael Beech Accountancy

Comments

  • timgriff
    timgriff Registered Posts: 55 Regular contributor ⭐
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    Hi, is the TWDV b/f for capital allowances definitely for the period ending 28/2/10?
  • MichaelBeechFMAAT
    MichaelBeechFMAAT Registered Posts: 16 New contributor 🐸
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    oops

    09
    Michael Beech FMAAT CIMA Dip MA
    Co -Director AM-Accounting & Business Advisors Ltd
    Director, MSBeech Enterprises Ltd t/a Michael Beech Accountancy
  • SLM
    SLM Registered Posts: 64 Regular contributor ⭐
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    I don't really follow your question that well, what is a CAP? I have never heard of this in my coursework yet?

    I have calculated my capital allowances as 41,666 - based on a 16 month period.
    Therefore adjusted trading profit would be 418,334.

    Do you mean you want me to split it into what is assessable for each tax year?
  • noodles
    noodles Registered Posts: 308 Dedicated contributor 🦉
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    what are the ommissions of the bmw?
  • noodles
    noodles Registered Posts: 308 Dedicated contributor 🦉
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    CAP is the chargable accounting period, yes you need to split it for 12 mths then 4 mths.
    the capital allowances are to go in the correct accounting period.
  • timgriff
    timgriff Registered Posts: 55 Regular contributor ⭐
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    Thanks for this, i'm losing motivation with revision!

    Is the answer: 328,000 for CAP ending 28/02/10 & 84,067 for CAP ending 30/06/10?

    assuming bmw emissions are normal and go in general pool.

    Quite tough the second bit. Don't like capital allowances, too many places that can trip you up!
  • MichaelBeechFMAAT
    MichaelBeechFMAAT Registered Posts: 16 New contributor 🐸
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    Yep

    So attachment gives more accuracy.

    see notes in file too. Don't know what I was thinking of. Hope it will ' be alright on the night' !!! :)
    Michael Beech FMAAT CIMA Dip MA
    Co -Director AM-Accounting & Business Advisors Ltd
    Director, MSBeech Enterprises Ltd t/a Michael Beech Accountancy
  • MichaelBeechFMAAT
    MichaelBeechFMAAT Registered Posts: 16 New contributor 🐸
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    Thanks for pointing out about the prior apr 09 expensive car rule. Doesn't say that in the book I have (out of date). So my answer is wrong. Main pool for the cars then?? :(
    Michael Beech FMAAT CIMA Dip MA
    Co -Director AM-Accounting & Business Advisors Ltd
    Director, MSBeech Enterprises Ltd t/a Michael Beech Accountancy
  • noodles
    noodles Registered Posts: 308 Dedicated contributor 🦉
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    Do you think you may be getting a bit confused, or maybe I am
    Do you not proportion the aia of 50k over 4mths to get 16667 so therefore a bal of 6333 is left and 40% fya is put on this of 2533.
    The 20% wda of the pool of 8960 is split over 4 mths

    Please tell me if i am wrong !
    nicky
  • noodles
    noodles Registered Posts: 308 Dedicated contributor 🦉
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    What year book are you working from as you may be learning it wrong, if you want I can scan what I have on capital allowances to you but there may be other sections that have changed too.
    nicky
  • MichaelBeechFMAAT
    MichaelBeechFMAAT Registered Posts: 16 New contributor 🐸
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    I've done a re-working. For first part I have 328,000 profit. For second CAP I have 86,177 profit - anyone the same?
    Michael Beech FMAAT CIMA Dip MA
    Co -Director AM-Accounting & Business Advisors Ltd
    Director, MSBeech Enterprises Ltd t/a Michael Beech Accountancy
  • Primble
    Primble Registered Posts: 734 Epic contributor 🐘
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    :( i'm going back to my safe place... and changing my sig.
  • timgriff
    timgriff Registered Posts: 55 Regular contributor ⭐
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    Hi everyone, i've double checked my previous answer and hope it is right - please correct me if i'm wrong! sorry can't seem to do a table on this forum....

    YE: 28/2/10 - 12 months

    -Car £14k added to general pool as presumably emissions are between 110-160 g co2
    -WDA 20% on expensive car: restricted to £3000.
    -WDA 20% on general pool (£14000).

    Profit = (345000/16*12) = 345000
    Cap Allowances = -17000.
    Tax trade profits = £328000

    PE: 30/6/10 - 4 months

    -AIA on 23,000 (allowance is 4/12 x 50000) = £16667
    -So the balance of £6333 goes to the FYA section attracting 40%

    -Disposal of 5000 on exp car means there is a balancing allowance of £8000
    -WDA in general pool is 20% of 56000 x 4/12 = 3733
    -FYA is 6333 x 40% = 2533 - FYA is never time apportioned so no need to scale down.

    So we have 16667 AIA, 8000 Bal allow, 3733 WDA & 2533 FYA = 30933 total allowances.

    Profit = (345000/16*4) = 115000
    Cap Allowances = -30933
    Tax Trade Profits = 84067

    Nb. I think i'm right in saying that time apportioning happens on the left: AIA, WDA
    If it's for a sole trader then 'business use' apportionment happens on the right where the allowances are.
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