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Balancing charge CT600

Balancing charge and asset disposal

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Hi there, 

I am really struggling with filling our company accounts due to the balancing charge on van disposal. Can anyone please confirm the following entries are correct? 

We bought a van in 2019 for £1,170 and claimed AIA in full. In 2020 we sold the van for £500. In the accounts we have a loss on disposal of £432 (£1,170 less depreciation of £238 less £500). When filling the company accounts this amount is included in other charges (box AC425), then in profits/loss on disposal on assets (box CP33) and then added back to the company's loss in the adjustment section (box CP51). 

Am I correct saying that the proceed of £500 needs to be added to the loss in the balancing charges in CP672 'total proceeds from disposal from main pool' since full AIA was claimed? 

Replies (5)

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By Wilson Philips
12th Aug 2021 11:51

It doesn't matter that AIA was claimed - you need to reflect the £500 proceeds in your computation. Whether or not you have a full balancing charge of £500 will depend on whether you had any residual expenditure (from other assets) in the pool.

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By Duggimon
12th Aug 2021 12:04

The van remains the van in the accounts and the profit/loss is the difference between carrying value and sale value, this is added back on the tax comp so it has no bearing on taxable profit.

In the tax comp the van ceased to be the van once you put it in the general pool. From that point on anything you do you do to the pool, so the £500 proceeds adjusts that figure, which may or may not produce a balancing charge.

Thanks (1)
By lionofludesch
12th Aug 2021 14:40

Terez - you need an accountant.

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By terez
12th Aug 2021 16:36

Many thanks to everyone for your answers!

There is nothing left in the pool as AIA was claimed on all assets we bought so I believe both £432 and £500 need to be added to the loss however I am not sure if the £500 goes to box 700 or 730 on CT600.

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Replying to terez:
By Wilson Philips
12th Aug 2021 17:04

terez wrote:
I am not sure if the £500 goes to box 700 or 730 on CT600.

My vote is for neither.

But I'll help you out - it doesn't make any difference.

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