Module 4 - Capital Allowances

Question 1

Who can claim VAT?

Answer 1

VAT registered businesses only claim back Irrecoverable VAT.

Non VAT registered companies should include VAT.

Question 2

Are alterations/ demolition of buildings/ machinery be allowable?

Answer 2

Yes

Question 3

What is the effective date?

Answer 3

The date at which paying for the item is unconditional

Question 4

What is the rule regarding Hire Purchase and capital allowance?

Answer 4

The whole capital element can be claimed from when the asset is brought in to use.

Question 5

What is the WDA?

Answer 5

Written down allowance (currently 18%) and is applied on a reducing balance method.

This is set for a 12 month period.

Question 6

What is the annual investment allowance?

Answer 6

AEA is £200,000 - although it was different in 2015!

It cannot be used for company cars.

Question 7

What is a disposal recorded at?

If the disposal price is greater than cost what do you record?

Answer 7

The lower of cost or proceeds

If there is a profit you record the cost as there cannot be a negative.

Question 8

What is the small pools allowance?

Answer 8

Any business with TWDV + Additions - Disposals of less than £1000 can write the full amount down to Nil.