Capital Allowance Computation

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jewels.p
jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
in AAT Level 4 (Level 8 in Scotland)
If you are selling a piece of Equipment for £500 that originally cost £3,000 from the Main Pool do you work out the WDA at 20% then take a balancing allowance of £500?

I am going through the steps of calculating capital allowances and it says Deduct the Proceeds of Disposals then Calculate the WDA on pool balances then Calculate any Balancing Allowances. :confused:

Thanks

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  • meibaker
    meibaker Registered Posts: 481 Dedicated contributor 🦉
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    jewels.p wrote: »
    If you are selling a piece of Equipment for £500 that originally cost £3,000 from the Main Pool do you work out the WDA at 20% then take a balancing allowance of £500?

    I am going through the steps of calculating capital allowances and it says Deduct the Proceeds of Disposals then Calculate the WDA on pool balances then Calculate any Balancing Allowances. :confused:

    Thanks

    you need to deduct the £500 first, then WDA 20%
  • Richard
    Richard Registered Posts: 373 Dedicated contributor 🦉
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    jewels.p wrote: »
    If you are selling a piece of Equipment for £500 that originally cost £3,000 from the Main Pool do you work out the WDA at 20% then take a balancing allowance of £500?

    I am going through the steps of calculating capital allowances and it says Deduct the Proceeds of Disposals then Calculate the WDA on pool balances then Calculate any Balancing Allowances. :confused:

    Thanks

    A balancing allowance/charge will only occur if there is no other item in that pool, for example, if you purchased motor vehicle that was later sold, a balancing allowance/charge would be used to bring the total to 'nil'.

    Therefore, if you have other capital items contained in the Main Pool you will not claim a balancing allowance.
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    I see thanks for the replies. There was only written down values for the Main Pool and two cars so I take it I just deduct the £500 disposal of the equipment from the main pool and then calculate the 20%.

    Thanks again

    (So not enjoying Business Tax!) :sad:

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