employment capital allowances

employment capital allowances

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Ok I have a scenario. We have an employed individual as an engineer. He starts work on 01 september 2014. Prior to this, he incurs expenditure on tools, say 6 years ago on 01 sep 2008. The individual brings these tools into use on 01 sept 2014. Am I right in thinking that applying s14 caa2001 the individual is ok to claim a capital deduction of say wda at 18 percent, based on market value on 01 sept 2014?

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By raychidell
22nd Sep 2014 15:08

WDAs for employee

Hi

Yes, in principle that is correct.

There is fairly extensive HMRC guidance (starting at EIM 36500) if you need further information, but bringing in at open market value is correct. 

(For general information, employees can claim AIAs. However, AIAs are precluded in this case by general exclusion 5 at s. 38B of CAA 2001. Technically, on the facts as you have presented them, I think the relevant section would be s. 13 rather than s. 14.)

As an employee, the period of account will begin when the employment begins and will end at the end of the tax year. So the 18% will, I think, need to be restricted to approximately 7/12 of 18% for the first year.

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