Tax Allowances |
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kawolsky
Vanorak Joined: 12 Mar 09 Location: Devon Status: Offline Points: 1284 |
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my accountant is crap at fitting kitchens!
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Studioman
Yardie Joined: 04 Apr 06 Status: Offline Points: 969 |
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must admit to not knowing anything about this allowance inspite of having many vehicles in our mini fleet! so with the knowledge gained from the forum i actually went for a meeting with my accountant on friday, quite ready for a showdown......however once explained to me i can now see the limited use of the allowance for most people
the way he explained it to me was:
it is a recession busting allowance designed to encourage investment, basically to make businesses spend money sooner rather than later. but the problem is once you have received the full 100% there is nothing left for the following years and if the asset is sold then you will have to (prematurely) repay some/most of that allowance. the way these allowances are normally 'drip fed' from a pool actually does suit most businesses
where it can be very useful indeed is offsetting a 'tax spike' (i.e. an unusually large tax liability) within the same accounting year.
to sum up then, a very useful weapon for small businesses who have had an unusually good year, not me then!
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triple
Yardie Joined: 14 Aug 08 Location: worcestershire Status: Offline Points: 645 |
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A bit off topic but i was speaking to my accountant about pensions and savings and i was surprised when he said to me that ( this is off the record ) he's put £33,000 into premium bonds.
He said some pensions can be a bit fragile and that by putting your money into premium bonds although you make no interest on your money, your money is safe and you ,re always in with a chance of winning £ in fact he said he wins something most months most of the time he wins only a few quid but he said he,s had a few decent wins, does make you think.
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Tornado red celtic mapped lwb 174 AXE. 2014 bmw s1000r. ktm 350 freeride 1975 yamaha rd350b |
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TwoFish
Yardie Joined: 16 Nov 06 Location: Misr Status: Offline Points: 288 |
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Good summary Studioman. The 100% year 1 allowance isn't really 'extra' allowance, just accelerated allowance. As you note, when you sell the asset there's 'payback' involved. There will be a balancing charge of the 'excess' allowances you've had (effectively the sale proceeds of the van), or at least a large a reduction in the value of your pool by that amount.
Depending on circumstances, the resulting spikes / troughs in your taxable profit could be an issue. Sometimes that will just be a timing thing, but sometimes there could be a permanent effect. For example (for those 'lucky' enough to be higher rate taxpayers), a big allowance in year 1 could mean that you get relief effectively at the lower 20% rate, and then when your profits spike next year when you sell the van, the 'payback' is at 40% It looks like your accountant has just demonstrated the value in advice from a professional who knows your circumstances, over generic information posted on an internet forum.
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kawolsky
Vanorak Joined: 12 Mar 09 Location: Devon Status: Offline Points: 1284 |
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I thought there was a £20,000 limit per person for premium bonds. must have gone up? |
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CLONKY
Yardie Joined: 23 Jan 06 Status: Offline Points: 828 |
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I think its 30K
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spaceshuttle
Not Quite Newbie Joined: 23 Nov 09 Status: Offline Points: 28 |
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two fish - sorry for spouting generic information
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TwoFish
Yardie Joined: 16 Nov 06 Location: Misr Status: Offline Points: 288 |
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Don't worry SS. Certainly not having a pop at you or suggesting supplying info is a bad thing. It was more (with my accountant's head on) the concern that someone might, on the strength of something I'd posted, take a course of action that wasn't best for them.
Your post does indeed sum things up rather well, and in far fewer words than I'd be capable of doing it in. Edited by TwoFish - 28 Feb 10 at 19:37 |
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spaceshuttle
Not Quite Newbie Joined: 23 Nov 09 Status: Offline Points: 28 |
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No worries twofish - that was the result of three nights late night reading, and writing it all down for a forum post was actually a good exercise for getting it straight in my head, but of course (as you correctly demonstrate above) it's still about as clear as brighton seawater! I am looking at a caravelle/shuttle/kombi it looks like from your link that they are all cars (for cap allowances) and even if the area is a grey one, best not to have a five year retrospective tax bill to swallow. How can it be that you could reclaim the vat as a commercial vehicle but then fall into the car category for other taxes Maybe the privately owned - then charge the 40p/25p expense is the easiest straightforward way to go? Any thoughts two fish? |
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Petehelmet
Yardie Joined: 05 Dec 08 Location: Nottingham Status: Offline Points: 262 |
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Flat rate VAT
This could come in for a few of you really interesting.
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Kev The Gas
Vanorak BUS WANKER Joined: 15 Jan 09 Location: West Sussex Status: Offline Points: 1304 |
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My accountant suggested this flat rate to me a few years back. After looking at my books ect it didnt appear to help me at all. Capital assets have to be over 2k to reclaim vat @ 17.5 %. I spend a lot of money each month / year on tools, diesel, vans {6 in 8 years dont ask ! } van running costs, gas and electrical registration fees, computer equipment { for the family use} van accessories/ van accessories/ van accessories ect ect. As a heating installation company, the flat rate payable is 8.5 % , which would not reduce our quartely repayments. By" not " using the Flat rate scheme, may be one of the rapidly declining perks of running your own company. Kev. |
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T5.1 T32 LWB Kombi 140 ps. Sold
T5.1 Caravelle Executive 2.0BiTDI 180PS DSG Sold T5.1 Kombi LWB 180 BiTDI DSG T6 California Beach 150 DSG |
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proxymoose
Groupie Joined: 30 Apr 09 Location: Surrey Status: Offline Points: 181 |
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Hi Guys
I haven't read the whole thread so excuse me but I do know a legend of a man who only does capital allowances and has saved/made me a fortune over the years. Worth emailing him if you need some advice: ian.sutton@suttons-ca.com or www.suttons-ca.com. He travels nationwide.
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The wheel's spinning but the hamsters dead!
______________________________ 1989 California Audi Q7 ZX9R |
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TwoFish
Yardie Joined: 16 Nov 06 Location: Misr Status: Offline Points: 288 |
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Sorry SS, I missed that. I'm afraid there's (to my mind) no simple answer and no substitute for working the numbers for all the scenarios. No small task. It's not my area of taxation though, so someone who specialises in small business taxation may have better instinct here. I wouldn't be quite so quick to dimiss the possibility that a Kombi might qualify for CAs mind, but again, I've no special insight there. |
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