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Tax Allowances

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kawolsky View Drop Down
Vanorak
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kawolsky Quote  Post ReplyReply Direct Link To This Post Posted: 26 Feb 10 at 19:18
 my accountant is crap at fitting kitchens!
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Studioman View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Studioman Quote  Post ReplyReply Direct Link To This Post Posted: 28 Feb 10 at 12:26
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 showdownAngry......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!
 
Smile
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triple View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote triple Quote  Post ReplyReply Direct Link To This Post Posted: 28 Feb 10 at 13:45
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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Post Options Post Options   Thanks (0) Thanks(0)   Quote TwoFish Quote  Post ReplyReply Direct Link To This Post Posted: 28 Feb 10 at 14:10
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% Ouch

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. Smile
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Post Options Post Options   Thanks (0) Thanks(0)   Quote kawolsky Quote  Post ReplyReply Direct Link To This Post Posted: 28 Feb 10 at 16:24
Originally posted by triple triple wrote:

he's put £33,000 into premium bonds.



I thought there was a £20,000 limit per person  for premium bonds. must have gone up?
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CLONKY View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote CLONKY Quote  Post ReplyReply Direct Link To This Post Posted: 28 Feb 10 at 17:09
Originally posted by kawolsky kawolsky wrote:

Originally posted by triple triple wrote:

he's put £33,000 into premium bonds.



I thought there was a £20,000 limit per person  for premium bonds. must have gone up?
 
I think its 30K
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Post Options Post Options   Thanks (0) Thanks(0)   Quote spaceshuttle Quote  Post ReplyReply Direct Link To This Post Posted: 28 Feb 10 at 18:14
Originally posted by spaceshuttle spaceshuttle wrote:

CAPITAL ALLOWANCES
The original poster is correct, a new AIA (annaul investment allowance) was introduced in APR 08/09 for ltd and st/part. The allowance is £50000 a yr and any capital expediture can be set against this. The good thing is VANS are allowed against the AIA so spend £20000 on a van and claim 100% of the expense against your profits, of course if you sell it later for £10000 there will be a balancing charge ie £10000 back on your profits, you do not have to claim the full 100% straight away, so depending on your profits spread it out a little.

Originally posted by TwoFish TwoFish wrote:

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. Smile

two fish - sorry for spouting generic informationWink
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Post Options Post Options   Thanks (0) Thanks(0)   Quote TwoFish Quote  Post ReplyReply Direct Link To This Post Posted: 28 Feb 10 at 19:35
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. Smile 

Edited by TwoFish - 28 Feb 10 at 19:37
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spaceshuttle View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote spaceshuttle Quote  Post ReplyReply Direct Link To This Post Posted: 02 Mar 10 at 13:03
Originally posted by TwoFish TwoFish wrote:

Going off topic a bit, it's quite bizarre just how many 'rules and regs' issues surround the whole 'seats and windows in the back' thing. Off the top of my head, I can think of:

Insurance issues
Registration and (VED) tax class
RTA / RTRA speed limit for 'goods vehicles'
For businesses:
  VAT position
  Capital allowances
For employees
  Private use benefit-in-kind issues (van benefit vs private car benefit)
Ferry fares and road tolls
Safety regs?

[Edit] Oh and we nearly had the London Low Emissions Zone rules as well, fortunately kicked into touched by Boris.

No worries twofish - that was the result of three nights late night readingSleepy, 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 taxesConfused 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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Post Options Post Options   Thanks (0) Thanks(0)   Quote Petehelmet Quote  Post ReplyReply Direct Link To This Post Posted: 02 Mar 10 at 20:52
Flat rate VAT
 
 
This could come in for a few of you really interesting.
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Kev The Gas View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Kev The Gas Quote  Post ReplyReply Direct Link To This Post Posted: 02 Mar 10 at 21:17
Originally posted by Petehelmet Petehelmet wrote:

Flat rate VAT
 
 
This could come in for a few of you really interesting.

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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Post Options Post Options   Thanks (0) Thanks(0)   Quote proxymoose Quote  Post ReplyReply Direct Link To This Post Posted: 05 Mar 10 at 10:26
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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TwoFish View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote TwoFish Quote  Post ReplyReply Direct Link To This Post Posted: 05 Mar 10 at 12:20
Originally posted by spaceshuttle spaceshuttle wrote:

Any thoughts two fish?


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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