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Capital Allowances and AIA

Capital Allowances and AIA

Client is self employed and works under CIS. On 19.03.11 client bought a van for £2,990 to be used for work purposes only. He also has a car that he only uses for personal use. He has never claimed any capital allowances before 2010-11 so there was nothing to be sold and come out of the pool.

The previous accountant claimed £187 General pool CA and £164 AIA (for a drill) in 2010-11.

Any thoughts please on the accountant not claiming £2,900 AIA for the van?


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27th Apr 2012 10:10

Basis period mismatch or low profits or mileage allowance

If the client prepares his accounts to, say, 30 June each year, then the cost of the van would not enter the capital allowances calculations until 2011-12 (Year to 30 June 2011)

Alternatively they may have claimed sufficient allowances just to bring the profit's down to the level of the personal allowance or Class 4 NIC lower profit limit.

Or most probably they included a deduction based on the AMAP rates instead.




Thanks (1)
27th Apr 2012 10:26

The clients year end is 5th April. And profits for 2010-12 were well above the personal allowance. 

Client worked close to home that year (2010-11) so AIA for the van would have been higher than AMAP. And he cannot think of what else could have gone in the general pool.






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27th Apr 2012 11:10


Client says that previous accountants didn't even ask him for his mileage, so they must have used the actual cost. 

But this doesn't explain why they didn't claim the AIA full amount. 

If they put the van in the general pool then CA would have been £598. And in the special pool would have been £299......but they only claimed £187. 

What would you do? Any thoughts would be very welcome please.


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27th Apr 2012 11:13

Have you asked?

Why not ask the previous accountants?

Thanks (1)
27th Apr 2012 11:14

Why don't ....

..... you ask the previous accountant? They are likely to have far more information about the client's circumstances than anyone here. (Unless, of course, that previous accountant is one of the 'anyone here' ;) )


EDIT - beat me to it by a whisker, Chris  :)

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27th Apr 2012 11:19

I have asked the previous accountants and i'm waiting for them to get back to me.

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