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Tax Insider Tip: Capital Allowances Must Be Claimed
Tax Insider publishes monthly newsletters and reports.
Capital allowances are not given automatically. They must be claimed and they must be claimed within the time limit.
A claim can be made in the tax return. This will be the self-assessment return for an individual, the partnership return for a partnership or the corporation tax return for a company.
The time limit by which capital allowances must be claimed depends on the nature of the business:
Self-employed: 12 months after the 31 January deadline for filing the return.
Partnership: 12 months after the 31 January deadline for filing the return.
Company: 12 months after the filing date for the return for the accounting period to which the claim relates.
Example:
Elizabeth is a self-employed caterer. She prepares accounts to 31 March and purchases various items of catering equipment during the year to 31 March 2015 in respect of which capital allowances are claimed.
She claims the allowances in her 2014/15 tax return, which is filed by the filing deadline of 31 January 2016.
The deadline for claiming capital allowances for 2014/15 is 31 January 2017. This is 12 months from the filing date for the 2014/15 return of 31 January 2016.
This is a sample tip taken from our 136 page guide:
101 Ultimate Tax Strategies Revealed.
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