capital allowance/dep'n in 1st year of trading

eddy2309
eddy2309 Registered Posts: 16 New contributor ?
I have a new client who has £10,500 of capital expenses in the first year of trading. His Net profit for year end 05.04.14 is £6,244, so well below the tax free allowance limit, but expected to be much higher next year. What would you suggest is the best way to deal with the £10,500? Obviously he cannot claim AIA next year for something bought in the previous tax year? or can he?!

Comments

  • paulstafford
    paulstafford Registered Posts: 126 ? ? ?
    Did he have any other income in the 13/14 tax year eg employment? You could then claim the aia in 13/14 and offset the loss against this income.
  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    No you cannot carry forward AIA. If you cannot utilise the capital allowances as paul suggests then disclaim them and use WDA in future years.
  • eddy2309
    eddy2309 Registered Posts: 16 New contributor ?
    That's as I thought. Thanks for the help
  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    Agreed but overlap profits need to be considered in relation to any saving generated
Privacy Policy