Capital Allowances
Discussion
Yes, I know, cutting it fine again.
A question about Capital Allowances when self employed.
Does one have to claim AIA in the first year - ie, full value of capital allowance, so then to add the complete value as a "profit" on disposal? It just seems a horrible way of having an unexpectedly large tax bill when selling the item?
Can I not just add it to the main pool and claim WDA 18% as normal with the difference between sale price and new written down value when disposing? Same overall outcome but without massive spikes.
Item in question is a high value musical instrument and unlikely to lose any money. I don't know how long I'll have it for though, maybe only a few years. Really not fancying a 5 figure spike in my "profits" if I have to sell it during a bad year...
A question about Capital Allowances when self employed.
Does one have to claim AIA in the first year - ie, full value of capital allowance, so then to add the complete value as a "profit" on disposal? It just seems a horrible way of having an unexpectedly large tax bill when selling the item?
Can I not just add it to the main pool and claim WDA 18% as normal with the difference between sale price and new written down value when disposing? Same overall outcome but without massive spikes.
Item in question is a high value musical instrument and unlikely to lose any money. I don't know how long I'll have it for though, maybe only a few years. Really not fancying a 5 figure spike in my "profits" if I have to sell it during a bad year...
Just replying to myself - it seems according to HMRC I can choose to using WDAs (Writing Down Allowances) instead of AIA (Annual Investment Allowance) if my profits are small. As the instrument is a significant cost compared to my profits that I would much rather claim the relief over a number of years so that's what I'll do.
Also, another question for any tax advisors as it seems a grey area amongst musicians. Musical instruments, are they generally main pool (18%) or special pool (8%) given most will last 25+ years. I am inclined to think main as I tend to change instruments every few years as I get bored/try something new. Again, does it make any real difference in the long run? As long as the balancing charge when sold is the difference in sale price and the written down value it doesn't matter does it?
Also, another question for any tax advisors as it seems a grey area amongst musicians. Musical instruments, are they generally main pool (18%) or special pool (8%) given most will last 25+ years. I am inclined to think main as I tend to change instruments every few years as I get bored/try something new. Again, does it make any real difference in the long run? As long as the balancing charge when sold is the difference in sale price and the written down value it doesn't matter does it?
Thanks 
Totally different question why you're here
I have noticed I have a tiny "repayment supplement" from last Jan of less than £4 which I only spotted as it affected my July payment on account. What could that be from? I'm pretty sure I didn't pay early so I can't see why they would be giving me a credit...
Totally different question why you're here
I have noticed I have a tiny "repayment supplement" from last Jan of less than £4 which I only spotted as it affected my July payment on account. What could that be from? I'm pretty sure I didn't pay early so I can't see why they would be giving me a credit...Gassing Station | Finance | Top of Page | What's New | My Stuff