Help?

monkeypuzzle47
monkeypuzzle47 Registered Posts: 134 Dedicated contributor 🦉
edited June 18 in AAT member discussion
Hope someone can advise me on this.
Preparing acs for sole trader who is allowed a 10 perecent wear and tear allowance of turnover for tax purposes. I want to record this allowance in the accounts in the P+L ac as wear and tear allowance however I am a little baffled how to treat the other side of the transaction as it is not money that has been pysically spent. Its like a depreciation.
Any idea what the correct accounting treatment of this would be in the accounts please- cant think where to put.
Bit tired this morning
yawn...
thankyou. advice would be great.

Comments

  • K H
    K H Registered Posts: 81 Regular contributor ⭐
    The only 10% wear and tear allowance i'm aware of relates to furnished letting income, do you mean this?

    This of course isn't trading income.
  • monkeypuzzle47
    monkeypuzzle47 Registered Posts: 134 Dedicated contributor 🦉
    no its a special wear and tear allowance for childcarers which is allowed from turnover. see attached

    http://www.hmrc.gov.uk/manuals/bimmanual/bim52751.htm
  • Anne Boleyn
    Anne Boleyn Registered Posts: 195 Dedicated contributor 🦉
    Wear and tear allowance

    Hi Monkeypuzzle47

    Year end journal.
    DR Wear and tear allowance
    CR Drawings

    Regards
  • monkeypuzzle47
    monkeypuzzle47 Registered Posts: 134 Dedicated contributor 🦉
    thank you thats what i have been doing all along , but suddenly thought that was wrong. Having one of those days.
    thankyou anne
    x

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