I have a client who installed air conditioning units in March of this year and has a 30 April 2012 year end. They have not been invoiced for this. The client wants to claim capital allowances on this in 2012 and is wanting to know if a payment can be made now to obtain this relief.
I understand that under section 5 of CAA 2001 that the basic rule is allowances are available when an unconditional obligation to pay arises. The exemption to this rule is when more than 4 months elapse between the date of the unconditional obligation, such as delivery date and the payment date under the legal contract then expenditure is treated as incurred when the legal obligation arises to pay not the delivery date.
The client has not been invoiced for this and after further questions has no legal contract, so when does the unconditional obligation arise for the client to claim allowances?
Many thanks in advance.