When starting a business (Sole Trader) and introducing tools and equipment, can I claim the market value of the assets introduced against the AIA ?
Looking at different websites there is some confusion, an excerpt from business link under AIA exclusions says:
- plant and machinery previously used for another purpose - for example, a computer used at home and introduced into your business
Also HMRC website seems to say pretty much anything is deemed as plant and machinery, apart from where trade is conducted in the asset, therfore there is no reason "tools and equipment" would be excluded, assuming the expenditure is indeed for assets?
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No
If the asset is pre-owned then you can only claim capital allowances.
If you purchased it specifically for use within this business/trade i.e. immediately before the trade commenced, then yes AIA can be claimed.
Yes, if...
As I see it if an asset is specifically acquired for a business before that business commences then the cost of that asset is an expense qualifying for AIA.
This is different to (for example) an employee plumber ceasing to be an employee and then becoming self-employed. His old tool kit introduced into the business had been purchased for a purpose other than the new business hence no AIA, instead WDA.