Capital allowances not claimed

Capital allowances not claimed

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My company has not claimed (nor disclaimed) capital allowances in the first two years on fixture & fittings of approx £10,000 as there were indufficient profits to claim against. Can we now claim WDAs in the 3rd year? Do HMRC assume allowances would/should have been claimed? If we sell next year will the value of the pool c/fwd be reduced by the allowances we did not claim?
Thank you for any assistance, Carole
Carole Walters

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By stephenkendrew
28th Mar 2007 07:30

claim WDA
No problem in claiming WDA (but not FYA!) in the third year.

If you haven't claimed any capital allowances so far, the value of the pool brought forward wil be £10,000.

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Steven Bone
By Steven Bone
28th Mar 2007 20:52

Claim OK
It is possible to add prior years' expenditure to the pool and claim WDAs in any later chargeable period, providing that the P&M is still owned in that later period. Assuming that the fixtures and fittings were all plant or machinery the claim amount would be £10,000.

Notional writing down allowances are not deducted, so the value carried forward would be £7,500 (assuming that the qualifying fixtures and fittings are the only assets in the pool and after deducting the single year's 25% WDA claimed). On sale it would be necessary to bring into account a disposal value based on an apportionment of the sale proceeds, subject to a maximum of the original £10,000 cost.

Steven Bone
The Capital Allowances Partnership LLP (www.cap-allow.com)
Co-author of "Tottel's Capital Allowances: Transactions & Planning"

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