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Disposal of Asset

Disposal of Asset

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Hi guys,

I have a tax calc where 2 pools are being used due to the CO2 emmissions of the cars varying. Some vehicles have been disposed off from both pools at a lower value than the B/F WDV so I was expecting to show the remaing balance as a balancing charge on the tax calc to bring the WDV C/F to zero. However using tax filer, it doesnt allow me to do this. Instead it works out a capital allowance charge for the year from  the lower value (WDV B/F Less Sales Proceeds).

My issue with this is that the vehicles are now fully disposed off and I showed a loss on disposal on the P/L (Albeit add it back for the purpose of the tax calc) yet I am having to keep a value for the asset in the tax calc and will have to do so for the years to come till the company closes.

Is this correct? Surely you would write it off totally in the tax calc too?

Apologies if i am being stupid here but I am a CIMA qualified and it is times like this I wish I had done ACCA!

Thanks guys.

Replies (7)

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By Tim Vane
16th Jun 2017 12:03

When the value of the pool drops below £1000 it should disappear with a small pools allowance. Until then, the pool will remain.

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By Portia Nina Levin
16th Jun 2017 12:33

Soletrader? Limited company?

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By khalm0
16th Jun 2017 12:52

limited company

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By Portia Nina Levin
16th Jun 2017 13:04

What Tim said then.

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By khalm0
16th Jun 2017 14:42

Even though the asset is no longer part of the fixed assets? I just dont get the logic of this - you would think it would get written off same time as the asset is disposed off!
I guess in essence it is spreading the impact over a longer period.....

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By Duggimon
16th Jun 2017 15:00

That's just how pools work. You would only get the balancing allowance right away with a single asset pool which doesn't apply to your situation.

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Red Leader
By Red Leader
16th Jun 2017 15:01

khalm0 wrote:

Even though the asset is no longer part of the fixed assets? I just dont get the logic of this - you would think it would get written off same time as the asset is disposed off!
I guess in essence it is spreading the impact over a longer period.....


Why do you think the tax treatment would follow the accounting treatment? (rhetorical question)
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