Hi,
I registered as a sole-trader in August 2010. Prior to this date I already owned two computers which are now used for business purposes. From what I gather, even though they were bought before the business began, I can bring these items into my business as fixed assets and claim 100% FYA Capital Allowances on their market value circa August 2010?
How do I work out the market value on such items - is there a calculation/percentage of the original cost which is commonly used to determine market value? Or is a rough figure based on: "what I would have got for them if I sold them on eBay" sort of thing acceptable?
Any guidance on this would be much appreciated.
Frank
Replies (12)
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Any reasonable value
But keep a print of what you use to justify the value.
As above only WDA available as not new
but....
if market value is greater than the actual expenditure then it is actual expenditure that is used (s13(4) CAA 2001)
Circumstances where AIA OK; VAT
The Annual Investment Alowance (AIA) could be claimed if the assets concerned were bought specifically for the business and not used until the business started - they are then pre-trading business fixed asset expenditure as opposed items bought for personal purposes, used as such and then subsequently brought into the business.
One other thing : VAT - if you are VAT registered then in some circumstances you can recover VAT paid on the assets concerned.
Main Pool Value = below £1000...
Thanks for all the replies - very helpful. But am I right in thinking that if the main pool's total value (which these items would go into) is less than £1000 then they can be written off completely and the 20% WDA doesn't come into it?
Write off the 20% first
Frank, write off the 20% first and then the resulting balance, if under £1,000 can be writen off in full in the same year.
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Just goes to show you how many interesting points there are on one fairly simple question!!
Write off the 20% first
Frank, write off the 20% first and then the resulting balance, if under £1,000 can be writen off in full in the same year.
I hadnt appreciated the £1k write off in the same year
If the 20% WDA in any year brings the WDV below £1k can I write off the balance in the same year? I hadn't appreciated that - I have been hanging on until the following year. Presumably the same for Ltd companies?
Incorrect treatment
Ian, your understanding was correct. The write off of a pool under £1,000 is itself a WDA and you can't have two WDAs in respect of the same pool in the same accounting/basis period. See http://www.hmrc.gov.uk/manuals/camanual/CA23225.htm
Assets intro by a related party
Isn't the point that the assets are introduced by a related party, not that they are second hand (the reason why AIA cannot be claimed.)