Capital Allowances

Becky V
Becky V Registered Posts: 374 Dedicated contributor 🦉
in AAT Level 4 (Level 8 in Scotland)
Hi i have got my business tax exam in a couple of weeks and am still getting confused with capital allowances, please could someone confirm which order the table should be as my Kaplan book is different to the answers on the AAT website.

Comments

  • Becky V
    Becky V Registered Posts: 374 Dedicated contributor 🦉
    Can anyone help me? Please my exam is in 2 weeks!!!!
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    What do you mean by "which order the table should be "?

    Are you talking about the layout of a capital allowances computation?
  • Becky V
    Becky V Registered Posts: 374 Dedicated contributor 🦉
    Hi Monsoon yes i am.
    In my Kaplan book it has:
    Additions with no AIA or FYA
    Additions with AIA
    Disposals
    WDA @ 20%
    Additions with FYA

    On the practise exams it is different and i keep getting the wrong answer!
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Bear in mind I'm coming at this from a practical point of view not a tutorial one.

    What you need to do is not so much memorise a formula of how to do it, but to understand the processes behind what you're doing. E.g. apply AIA first, then disposals, then a WDA on the rest etc.

    If you understand how CAs work, then you're more likely to look at your computation and see where it's going wrong.

    E.g. you can't take a WDA on amounts that have already been included as AIA or FYA, and make sure you add in any disposal proceeds to the pool.

    I find the layout of CA comps really hard and I rely on understanding how they work and interact rather than getting the perfect layout; that way I ensure I get the right answer.

    Can you compare the Kaplan examples to the exam answers to see where you're going wrong?
  • Becky V
    Becky V Registered Posts: 374 Dedicated contributor 🦉
    Thank you so much Monsoon, after reading this i have looked at the answers again and it makes perfect sense!!!!! Thanks again :)
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Becky V wrote: »
    Thank you so much Monsoon, after reading this i have looked at the answers again and it makes perfect sense!!!!! Thanks again

    Really pleased to hear it, glad I could help. Good luck in the exam :)
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
    Monsoon wrote: »
    Really pleased to hear it, glad I could help. Good luck in the exam :)

    You should be teaching!
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    PGM wrote: »
    You should be teaching!
    In what time would I fit that in, eh? ;)

    (Thanks :-) )

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