Hello all,
When calculating the WDA on main pool plant & machinery, how should I treat the disposal of an item at nil value? In this case the item was simply binned as it no longer worked and had no scrap value.
I've read the HMRC guidance but feel it's a bit ambiguous on this point.
Is it correct to,
A) Deduct the purchase price of the scrapped asset from the value of the pool, or
B) Retain the value in the pool and deduct the sales value only, in this case nil.
Thanks for your help.
H
Replies (5)
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B
You're entitled to the tax relief on the cost of the asset.
If you deduct the cost of the asset, you'll get nothing.
WDA's
If the item was scrapped, it is treated as disposed of at Nil value. The pool remains and you claim your 18% writing down allowance each year.
One point that is often overlooked is if the value of the pool is small (ie less than £1,000) then the whole pool may be written off in the year.
Regards
Mark
Wesram Ltd