Capital Allowance Computation

jewels.p

If you are selling a piece of Equipment for £500 that originally cost £3,000 from the Main Pool do you work out the WDA at 20% then take a balancing allowance of £500?

I am going through the steps of calculating capital allowances and it says Deduct the Proceeds of Disposals then Calculate the WDA on pool balances then Calculate any Balancing Allowances.

Thanks

meibaker

jewels.p wrote: »

If you are selling a piece of Equipment for £500 that originally cost £3,000 from the Main Pool do you work out the WDA at 20% then take a balancing allowance of £500?

I am going through the steps of calculating capital allowances and it says Deduct the Proceeds of Disposals then Calculate the WDA on pool balances then Calculate any Balancing Allowances.

Thanks

you need to deduct the £500 first, then WDA 20%

Richard

jewels.p wrote: »

If you are selling a piece of Equipment for £500 that originally cost £3,000 from the Main Pool do you work out the WDA at 20% then take a balancing allowance of £500?

I am going through the steps of calculating capital allowances and it says Deduct the Proceeds of Disposals then Calculate the WDA on pool balances then Calculate any Balancing Allowances.

Thanks

A balancing allowance/charge will only occur if there is no other item in that pool, for example, if you purchased motor vehicle that was later sold, a balancing allowance/charge would be used to bring the total to 'nil'.

Therefore, if you have other capital items contained in the Main Pool you will not claim a balancing allowance.

jewels.p

I see thanks for the replies. There was only written down values for the Main Pool and two cars so I take it I just deduct the £500 disposal of the equipment from the main pool and then calculate the 20%.

Thanks again

(So not enjoying Business Tax!) :sad: