Insurance claim

AndreaMc

Hi A client of mine has had some money back from an insurance claim where tools were stolen from a vehicle, Im just wondering how I deal with this in the accounts and the tax implications?

Thanks Andrea

MarieNoelle

Hi Andrea
If the tools are capitalised the proceeds from the claim would be treated in the accounts as disposal proceeds in the P&L and for tax a balancing charge may arise (although if new assets are bought this will be cancelled by AIA).
If the tools are not capitalised then I would put it as misc income but it would again be cancelled by the expenditure on new tools.

The insurance claim should put the trader in the same position as before.

Hope this helps.