Prior Owned Assets

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:09AM in AAT student discussion
Morning<BR><BR>I am looking for some help on assets which were owned before a sole trader started trading. <BR><BR>For example a beauty therapist left her job and went mobile, most of the equipment needed she already had, having purchased these over the years for use at home. So no receipts. <BR><BR>Are you allowed to introduce these in to the accounts in order to claim capital allowances and if so at what value would you value the assets at? Also is there any time limits to this? <BR><BR>I would be grateful for any help given.<BR><BR>Thanks<BR>

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Prior Owned Assets

    You can fetch them into the business and claim capital allowances, though I can't remember whether you claim first year allowances or if it just goes straight to the normal percentage. I recently completed both my brothers' self employment pages and I'm sure that I only claimed 25% on items brought into the business. I didn't have receipts either as a lot of them were tools already owned from a while ago which we just put a nominal value on.<BR><BR>I think as long as you aren't being stupid and putting thousands down when it's really only worth say £100.00 then the inland revenue aren't bothered. <BR><BR>Have you contacted your local inland revenue office as they run courses that help with stuff like this, and I know that my own tax office are very helpful if I ring up and query something.<BR><BR>Hope this helps.<BR><BR>Andrea
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Prior Owned Assets

    So long as the P&M had not been the subject of a prior claim for CA's (enhanced or not) I can see no reason why you should not claim FYA.<BR>I have always found that a softly softly approach with the IR is counter productive, In my firm we are fairly aggressive in our claims and attitude. Having said that, I am not advocating e.g. overstating values of assets but of putting the highest sustainable value on them and claiming the largest deduction possible. So long as you disclose what you are claiming then you are unlikely to face a discovery assessment in subsequent years.<BR>Always bear in mind that, so long as you are dealing with relatively senior IR staff i.e. Compliance Inspectors and above, they will inevitably make a deal on unpaid tax if they win on a point of interpretation or law.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Prior Owned Assets

    Thanks for both of your responses. It been a great help. I'm going to be having a fun weekend now, filling out self assessment forms. <BR><BR>Regards<BR>

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