AIA after short period

Is all AIA allowance lost after Short Period

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Hi

Limited Company incorporated on 1st April 2015. Spends 100k on fitting out a cafe. Starts trading on 1st February 2016. If we make the accounts up to 31st March 2016 the AIA gets apportioned to 1/12 of the allowance. Does that then mean in year 2 the only option is to then claim 18%? Or is AIA avalible for the first 12 Months of trade?

 

Thanks

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paddle steamer
By DJKL
07th Dec 2016 11:07

Surely 2/12ths , Feb and March.

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By Marion Hayes
07th Dec 2016 11:16

To answer question it is period based so if transaction did not happen in period 2 there is no AIA to claim, just 18% of pool brought forward. Don't forget if there is a balance not claimed you also get 18% of the non-qualifying portion in period 1.
Edit: Hit post too soon. Also check out whether any of the expenditure matches the First year allowance criteria - sorting out a café may well include qualifying water or power systems - which does not count towards the AIA allowance

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Replying to Marion Hayes:
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By Portia Nina Levin
07th Dec 2016 11:18

The expenditure is deemed to have been incurred on day 1 of trading, Marion.

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Replying to Portia Nina Levin:
By Marion Hayes
07th Dec 2016 11:36

Thanks Portia.
Hadn't spotted that incorporation before beginning of accounting period so definitely not available period 2. Wish I could blame anything except advancing years

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Replying to Marion Hayes:
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By Portia Nina Levin
07th Dec 2016 11:48

Eh? AIA is available, if the expenditure qualifies, but is restricted as the OP suggests.

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paddle steamer
By DJKL
07th Dec 2016 11:38

Edited out previous part:

Are you sure full fit out cost of £100k is eligible for AIA anyway?

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By Adam12345
07th Dec 2016 11:37

You could extend the accounting period,

And also, if the fixtures and fittings would be classed as long life assets or integral features, they might not qualify for WDA at 18% either, just the special rate pool allowance at 8%

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By Scanman
07th Dec 2016 11:54

Thank you for the responses

Yes, sorry started trading 1st March. 100K is a rounded figure and this is machines, counters etc.

So we're saying its lost after the first one month period?

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By Scanman
07th Dec 2016 11:55

was hoping to avoid extending the period but might be the only option

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Replying to fawltybasil2575:
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By Portia Nina Levin
07th Dec 2016 13:53

Quote:

@ Scanman [OP]

It would normally be more appropriate to prepare the first Accounts for the 12 months starting with the first day of trading [1 March 2016], ie for the year to 28 February 2017 [albeit the Accounts would show the incorporation date of 1 April 2015, and the trading start date of 1 March 2016].


With respect Basil, this is b*llocks. A company must prepare accounts that run from incorporation, and cannot have a period of accounts covering more than 18 months (and 7 days). So the latest date that the accounts could run to is 7 October 2016.
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By Scanman
07th Dec 2016 14:34

Yes Dormant accounts would be filed at Companies house. With CT i usually write to them and let them know when the trading period starts and to mark all previous periods as dormant so i know what fawltybasil2575 is saying

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By petersaxton
07th Dec 2016 19:42

Make the first set of accounts end before the capital expenditure starts and then the second set of accounts can be for 12 months. Other end dates of first set of accounts may be acceptable depending on numbers involved.

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