Start up costs in previous year can you still claim AIA

Start up costs in previous year can you still...

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I have a client who already runs one business and who started a second business, being a cafe, he started trading on the 10th April but most start up cost including all new equipment was in the previous tax year.  Am I right in thinking they are deemed to have been purchased on the first day of trading and so I would claim AIA in the first trading year?  Or do I need to claim it in the previous year and carry forward a loss?  In which case what date would be his starting date?  

Thanks for any guidance Jean

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By plummy1
08th Jul 2012 22:41

Capital Allowances Claims

Jean,

My understanding is that you cannot claim  capital allowances unless you are trading so the expenditure would be treated as if it occurred on the first day of business. However if your client now purchase a second cafe i.e. started a chain they could claim the capital allowances because the expenditure would be incurred as part of an existing trade.

Hope that makes sense. 

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Man of Kent
By Kent accountant
08th Jul 2012 23:11

Depends

If the equipment was purchased prior to commencement of the trade but was specifically purchased for the new business, then yes AIA can be claimed.

If the equipment was already owned by your client and he then decided to transfer it into his new business, then AIA can't be claimed.

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By jmleeco
09th Jul 2012 11:08

Start up costs in previous year can you still claim AIA

Thank you for your comments.  Yes the equipment is new and bought specifically for the new business.  So am I right in thinking I can claim AIA in 12/13 when he started trading, although the equipment was purchased in 11/12.   Thanks Jean

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By Ding Dong
09th Jul 2012 14:01

Had a similar one myself

 

This should help....

 

http://www.hmrc.gov.uk/manuals/camanual/CA23083.htm 

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