Many thanks for your answers - confirms my thought exactly
At the risk of upsetting the OP, it worries me that so many people use the services of part-qualified (Studying) or under-qualifed (AAT) to prepare their company accounts.
Full marks to the OP for knowing what is correct, and checking it out when put into doubt as to whether it is correct. No criticism of him.
And is it fair to expect an AAT to be knowledgable about the legal aspects of Company Accounts?
OK.... here comes the storm of protest about qualified accountants who are rubbish - and there are plenty of them.
But when you go to see an Doctor or a Solicitor you expect, and do, get a suitable qualified person.
Now I've got my tin helmet on....
Problem is that all these phone call care so costly in time not to mention nerves!
Good one that!
I thought all "certifieds" were crackers!
looks like thegable and I are of the same opinion
Looks like I;m with thegable on this one --- but I'm certainly open to being corrected by the experts!
Finance company says that the payments will be 100% deductible? As if it is a rental agreement.
Is that correct if the asset is being capitalised?
And if the payments are 100% deductible then of course there will be no capital allowance.
So the P&L account will show depreciation and interest - and these will be added back in the tax computation and the actual repayments will be deducted.
That's how I read what is being said. Am I correct --- and is this treatment correct? Tax specialists expertise needed here please.
I must admit that I would have treated the whole thing as a hire agreement on the basis that the final payment to repurchase the plant at the end of the lease is one which the client presumably is not committed to (or are they?). I'd have treated it as a hire agreement until the final (voluntary!) payment is made and then the final payment is a separate purchase of assets attracting Capital allowances.
Presumable I'd have been way off the mark????
Yes, there's a CT liability - but fairly minimal.
The Interest income at the CT rate - i.e on a loan averagin £20,000 - interest at 4% and CT at 20%, the charge is only £160.
why not charge interest and avoid the BIK
I always have the company charge interest at the official rate on any director's loan that goes over £5,000 at any time during they year.
That way there is no benefit in kind and nothing to disclose on a P11d -- or am I missing something here?
Take my advice and use VT+.
I've been using it since 1997 and it does the job very well.
Whateveer you do, don't use SAGE!
VT and HMRC software
That's interesting _ I didn't know you could attach a VT file to the HMRC software.