Capital Allowances

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jilt
jilt Registered Posts: 2,903 Beyond epic contributor 🧙‍♂️
in General accounting discussion
Could someone just clarify please do you have to claim the AIA on qualifying assets or can you opt to claim a first year or written down allowance.

My SA client purchased a recovery truck for £4150 at the beginning of his first year 2009-2010 and he has only made a very small profit below the personal allowance before any capital allowances. When added to his employment income it gives him a tax liabilty of £1550. He has already paid £1446 through PAYE and I don't want to waste any capital allowances that I don't have to claim.

Yes he could receive a tax refund but he would rather leave any allowances he doesn't have to claim this year until next when he expects to make more money. Would prefer to claim only 20% but not sure if that's possible. I can't seem to find anywhere that says you have to use one method over another.

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  • jilt
    jilt Registered Posts: 2,903 Beyond epic contributor 🧙‍♂️
    Options
    Finally got through to HMRC, apparently we can choose not to claim the AIA and can choose either option 40% FYA or 20% WDA, obviously if choosing one of those can only claim 20% WDA next year, cannot carry forward the AIA to next year.

    To be honest he may as well claim the AIA this year cos he'll get back over £700.

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