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Post Info TOPIC: Balancing Allowance


Senior Member

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Balancing Allowance


Tax question please as I'm having a confused moment.

I have a sole trader client who has scrapped a vehicle which has had no capital allowances claimed but b/f in special rate pool ( it has private use and is split between two trades). This has created what I would consider to be a balancing allowance and I would have added this to the capital allowances but looking at HMRC guidance it states that balancing allowances can only be claimed when the business closes?

Is this correct? If so, would the pool just continue to receive WDA despite the fact the vehicle no longer exists.

Thanks in advance

Valerie



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Guru

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Hi Valerie

If the vehicle is used partly for private purposes then it should not be in the special rate pool but in a single asset pool which would mean that balancing allowances are available on disposal.



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Senior Member

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Date:

Hi Doug

Thanks
I'm sorry yes my mistake, it is in a single asset pool. I did say I was having a confused moment!
Assuming that I can then claim a balancing allowance. Would that then go as other Capital Allowances on the return as there is a box for balancing charges but not allowances.

Thanks
Valerie


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Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



Guru

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Posts: 1106
Date:

lots to learn wrote:

Hi Doug

Thanks
I'm sorry yes my mistake, it is in a single asset pool. I did say I was having a confused moment!
Assuming that I can then claim a balancing allowance. Would that then go as other Capital Allowances on the return as there is a box for balancing charges but not allowances.

Thanks
Valerie


Hi Valerie

Not sure what software you use, but I use Taxfiler and if you have the WDV in the single asset pool and then put in the disposal proceeds it should work out the balancing allowance automatically and input this into the return, I would have thought this would be similar with most software



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice



Senior Member

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Posts: 329
Date:

Thanks Doug

Yes, I have recently started using taxfiler so I'll have a look at that.

Have a great weekend

__________________

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.

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