[[GQC] Tim]

Hey,

Just wondering how this works, because in my first year I've bought all my tools, and ladders. Now I'm kind of wondering how I should claim Capital Allowances for the smaller stuff. It falls under tools/equipment, so I would say yes.

Like, I've bought things from different suppliers, sqeegees, Bucket, ladder stabilisers, extension poles and everything. It all adds up to a considerable amount. From July to 5th of April, it's about £737.

Is it okay to add all those different receipts up, and claim capital allowances on that? Have one pool for Tools and Equipment, and another for my Van?

I called the help line, got redirected to the CA technical advisor, but forgot to ask this. Man wasn't very helpful at all, and the whole time I had the feeling he was trying to fob me off, cuz he had other stuff to do, bit difficult really. Sort of put me off really.

Anyway, if anyone can help me on this one, that'd be great.

[[GQC] Tim]

Also he said I can claim 25% or nothing FYA, but I read somewhere that if you want to you can even claim 10% FYA. What's up with the contradiction?

Please don't tell me get an accountant. Replys like that do not help, and I simply don't want / can't afford one.

[Ian W]

Do you have a local tax office? I visited mine and they were quite helpful.

They also have free courses available to show you how everything should be done. My wife went on one and found it really useful and was given a card by the person running the course. She called them directly a couple of times when she needed clarification and was always given as much help as she needed.

Oh, and the Daily Mail publishes a tax guide. I found one in my local bookshop - really helpful.

[windowwashers]

Hey,

Just wondering how this works, because in my first year I've bought all my tools, and ladders. Now I'm kind of wondering how I should claim Capital Allowances for the smaller stuff. It falls under tools/equipment, so I would say yes.

Like, I've bought things from different suppliers, sqeegees, Bucket, ladder stabilisers, extension poles and everything. It all adds up to a considerable amount. From July to 5th of April, it's about £737.

Is it okay to add all those different receipts up, and claim capital allowances on that? Have one pool for Tools and Equipment, and another for my Van?

I called the help line, got redirected to the CA technician, or whatever that means, but forgot to ask this. Man wasn't very helpful at all, and the whole time I had the feeling he was trying to fob me off, cuz he had other stuff to do, bit difficult really. Sort of put me off really.

Anyway, if anyone can help me on this one, that'd be great.

My advice would to be to get an accountant, they save you more than they cost.

Ian

[[GQC] Tim]

Totally didn't realise you could just walk in your local tax office. That's nice, I might do that. But anyway, it's only one question, surely someone on here would know?

My advice would to be to get an accountant, they save you more than they cost.

Ian

Please don't tell me get an accountant. Replys like that do not help, and I simply don't want / can't afford one.

What did you make of that ^. Did you even read my post?

[Helen]

Please don't tell me get an accountant. Replys like that do not help, and I simply don't want / can't afford one.

What did you make of that ^. Did you even read my post?

Before anything else. yes I have read about the accountant bit!
Yes you can go to the local tax office for advise, but they probably won't tell you about the %'s you can claim for working from an office at home and things like that....an accountant can. On the face of it, it does look like an expense that perhaps you could do without, but ours has saved us £100's over the years. His fee is also an expenditure which comes off your figures at the end of the year. Why not search out an accountant that specialises in small businesses in your area, ask for a general quote and just see. You never know it may just save you money in the long run

[chrismroberts]

Well... this is how I've done it... and its the way I understand it. Please dont take this as law, as I may be wrong, but it might give you more of an idea.

I think things like buckets, squeegees, ladders, pockets... resin, that sort of thing can be claimed as business expenses. They are wear and tear items that have little or no residual value. The larger things like WFP systems, vans, cars etc are depreciating assets that can be resold to generate income. Hence the 25% a year writing down allowance. This lets you claim the depreciation of the asset as a cost, but not the entire value....

[[GQC] Tim]

Got a simple straightforward answer. Group them all together. Same man, that guy seriously did not feel like talking today or something. haha. lol

Riiight. Okay then. I'm just assuming that everything that lasts longer then 12 months can be considered capital allowance. Ladders, poles etc. Rest would be consumables.

[Paul Coleman]

Got a simple straightforward answer. Group them all together. Same man, that guy seriously did not feel like talking today or something. haha. lol

Riiight. Okay then. I'm just assuming that everything that lasts longer then 12 months can be considered capital allowance. Ladders, poles etc. Rest would be consumables.

That's how I understand it too but I could be wrong.  Of course, the next bit is deciding how many years to spread a capital allowance over for different items.  I believe that your vehicle is spread over four years but I've no idea about other stuff.

[Village Gleam]

All that you said is correct gqc as far as I know.

You may call it depreciation but on your tax form it is capitol allowances and ir has set this at 25%.
Computer stuff is different and may be 100%
Vehicles must be seperate again at 25%, and there may be an adjustment necessary for personal use.
 
Yes you need an asset pool- everything (asset) you buy goes in to mount the value. Claim 25% at end of tax year, then carry the residual value over to the following year and start adding again as you buy.

Agree with sheipmeister

[williamx]

If you buy any equipment that will be used for more than 12 months then the following applies.

If any item is over £200.00 then you can only claim 50% in the first year and then 25% each year tereafter untill you have claimed the total valve back.

If any item is under £200.00 then you can claim 100% back in the currant tax year.

If you buy something over £200.00 and its breaks or gets stolen/lost then you can claim 100% in the currents tax year.

[[GQC] Tim]

If you buy any equipment that will be used for more than 12 months then the following applies.

If any item is over £200.00 then you can only claim 50% in the first year and then 25% each year tereafter untill you have claimed the total valve back.

If any item is under £200.00 then you can claim 100% back in the currant tax year.

If you buy something over £200.00 and its breaks or gets stolen/lost then you can claim 100% in the currents tax year.

Thank you very much for the help, was sort of waiting for you to drop by, that made things clear, also thanks to Mr Solubility

How about the asset pool? The item under £200 - 100% wouldn't work there would it, because it's a pool (all combined) or not? So just 50% or 25% FYA?

Please verify if this is right, because this is what he told me to do :

What I basically did was claim CA for the Van 25% (then further restricted at 60% Business use), and for the pool of equipment and tools, also 25%. (Didn't want to use 50%, because of my earnings under the 5K turnover limit, so carrying forward more balance to the second year, when I earn more.)

And then on the expenses, I had Van repairs/Parts, Diesel, Road Tax and Printer supplies, all at 60/40 Business/Personal use aswell. Rest of my expenses like Business Insurance, clothing etc 100%, what I do not use personally, but purely for business.

Right or.....not?

[Village Gleam]

That's clarified it for me. I haven't done my first window cleaners tax return yet, but I am certain you have been given the correct advice. To me that was very succinct and well put.

[Nathanael Jones]

I got an accountant this week,... she's saving me money on my tax bill by the look of it, and trying to claim back some of what I paid right back to 2004!
She's also told me I was doing my VAT wrong, and I may have to pay a little more on that. 

It has taken a huge amount of stress off my shoulders, and she'll save me more than she charges me,... so I couldn't recommend it more.

[williamx]

If you buy any equipment that will be used for more than 12 months then the following applies.

If any item is over £200.00 then you can only claim 50% in the first year and then 25% each year tereafter untill you have claimed the total valve back.

If any item is under £200.00 then you can claim 100% back in the currant tax year.

If you buy something over £200.00 and its breaks or gets stolen/lost then you can claim 100% in the currents tax year.

Thank you very much for the help, was sort of waiting for you to drop by, that made things clear, also thanks to Mr Solubility

How about the asset pool? The item under £200 - 100% wouldn't work there would it, because it's a pool (all combined) or not? So just 50% or 25% FYA?

Please verify if this is right, because this is what he told me to do :

As long as 1 item has not cost more than £200.00 then you can claim 100% of the pool.

[Feen]

Don't quote me here, but my accountant told me recently something along these lines (I will ask him and pay attention nearer the time): from the next tax year you can claim 100% of a capital purchase such as a vehicle in year 1 if you want. I suspect that applies to all capital purchases. You may not want to for tax reasons, but basically small businesses are being more flexibility. Now I know you said you didn't want to be told to get an accountant..............best investment you will make imho

[[GQC] Tim]

Don't quote me here, but my accountant told me recently something along these lines (I will ask him and pay attention nearer the time): from the next tax year you can claim 100% of a capital purchase such as a vehicle in year 1 if you want. I suspect that applies to all capital purchases. You may not want to for tax reasons, but basically small businesses are being more flexibility. Now I know you said you didn't want to be told to get an accountant..............best investment you will make imho

Partially true, apparantly not for Cars (I assume Vans aswell then) :

http://www.bytestart.co.uk/content/taxlegal/9_6/capital-allowances-2008-9.shtml

Google for the win.

@ williamx

Thanks again mate, that's brilliant, I can claim 100% then, but I won't do it, since I won't have to pay any tax anyway. As for everyone saying get an accountant, I'm rubbish with stuff like this, but I don't find it too difficult to do it for myself really. It might change a lot though when you employ someone.

[[GQC] Tim]

Hmmm interesting :

Under the present systems cars priced at over £12,000 qualify for an annual tax allowance of no more than £3,000 until they are sold, at which point relief is given for any residue of expenditure. This is a complex system that requires detailed record keeping, but is to be replaced from April 2008 by an emission based system. As might be expected, cars with the lowest emissions will attract the most favourable tax relief, but final details are awaited.
 
Businesses should carefully consider the timing of capital expenditure over the next 12 months, as the timing may have a significant effect on the tax relief that is due.

[Paul Coleman]

Hmmm interesting :

Under the present systems cars priced at over £12,000 qualify for an annual tax allowance of no more than £3,000 until they are sold, at which point relief is given for any residue of expenditure. This is a complex system that requires detailed record keeping, but is to be replaced from April 2008 by an emission based system. As might be expected, cars with the lowest emissions will attract the most favourable tax relief, but final details are awaited.
 
Businesses should carefully consider the timing of capital expenditure over the next 12 months, as the timing may have a significant effect on the tax relief that is due.

It's about time the system was altered too.  Simplification is important - as is extra tax relief.  After all, if you decide to replace equipment more frequently, you do get more tax relief from April but, of course, you would still have to show the amount that you sell the second hand equipment for.  I have always wondered what the point was in forcing businesses to spread their capital allowances over several years.  Even with vans, if you want to buy brand new and change it every year for the tax relief, what would be the problem?  You would still have to show the amount you sold it for anyway so Mr Taxman would still get a piece of the action.
Anyway, I'm unlikely to get much of a bill this coming January/July.  My turnover was pretty much the same as the previous year but by the time I've factored in loads of WFP expenditure, that should knock it down a long way - even with much of the allowance spread over several years.

[Londoner]

I classify a lot of my equipment purchases in any year , brushes, pole, hoses, pump etc as "consumables" because their life expectancy is only about a year anyway. That way you write them off against tax in one go. It gets complicated trying to write everything down by 25%  year on year. That really should only apply to things you really expect to be around in four years and lets face it thats probably not much stuff. Even ladders wear out. Vehicles are a different story.

The other sound advice was get an accountant.

[windowwashers]

Hmmm interesting :

Under the present systems cars priced at over £12,000 qualify for an annual tax allowance of no more than £3,000 until they are sold, at which point relief is given for any residue of expenditure. This is a complex system that requires detailed record keeping, but is to be replaced from April 2008 by an emission based system. As might be expected, cars with the lowest emissions will attract the most favourable tax relief, but final details are awaited.
 
Businesses should carefully consider the timing of capital expenditure over the next 12 months, as the timing may have a significant effect on the tax relief that is due.

It's about time the system was altered too.  Simplification is important - as is extra tax relief.  After all, if you decide to replace equipment more frequently, you do get more tax relief from April but, of course, you would still have to show the amount that you sell the second hand equipment for.  I have always wondered what the point was in forcing businesses to spread their capital allowances over several years.  Even with vans, if you want to buy brand new and change it every year for the tax relief, what would be the problem?  You would still have to show the amount you sold it for anyway so Mr Taxman would still get a piece of the action.
Anyway, I'm unlikely to get much of a bill this coming January/July.  My turnover was pretty much the same as the previous year but by the time I've factored in loads of WFP expenditure, that should knock it down a long way - even with much of the allowance spread over several years.

I am dreading my tax bill this time

[Ian_Giles]

I classify a lot of my equipment purchases in any year , brushes, pole, hoses, pump etc as "consumables" because their life expectancy is only about a year anyway. That way you write them off against tax in one go. It gets complicated trying to write everything down by 25%  year on year. That really should only apply to things you really expect to be around in four years and lets face it thats probably not much stuff. Even ladders wear out. Vehicles are a different story.

The other sound advice was get an accountant.

ditto for me too, I do the mileage thing for my van, forgotten exactly how much it is, but you claim so much per mile for the first 10 or 12 thousand miles, and then something like 25p per mile thereafter.
But that includes everything, fuel, servicing, depreciation (or so I believe) lease payments and so on.

For my tools and equipment I put them down as consumables, poles break (well, mine do ) Batteries wear out (Don't they squeaks? ) hoses need replacing as do pumps.
For large capital investment it makes sense to be able to claim it back over a number of years, thereby reducing your tax burden for several years, if they are now going to build in greater flexibility for small businesses then great.

My turnover is increasing year on year now, so for me it may well be an accountant for next year...we shall wait and see

Ian

[windowwashers]

I classify a lot of my equipment purchases in any year , brushes, pole, hoses, pump etc as "consumables" because their life expectancy is only about a year anyway. That way you write them off against tax in one go. It gets complicated trying to write everything down by 25%  year on year. That really should only apply to things you really expect to be around in four years and lets face it thats probably not much stuff. Even ladders wear out. Vehicles are a different story.

The other sound advice was get an accountant.

ditto for me too, I do the mileage thing for my van, forgotten exactly how much it is, but you claim so much per mile for the first 10 or 12 thousand miles, and then something like 25p per mile thereafter.
But that includes everything, fuel, servicing, depreciation (or so I believe) lease payments and so on.

For my tools and equipment I put them down as consumables, poles break (well, mine do ) Batteries wear out (Don't they squeaks? ) hoses need replacing as do pumps.
For large capital investment it makes sense to be able to claim it back over a number of years, thereby reducing your tax burden for several years, if they are now going to build in greater flexibility for small businesses then great.

My turnover is increasing year on year now, so for me it may well be an accountant for next year...we shall wait and see

Ian

Ian my advice would be to get an accountant, if you do all of it yourself they look over it and correct anything thats wrong, when I got mine a few years back I got a massive cheque back as I had over paid quite alot of money that I did not know about.

[bluez]

dont know if anyone has thought of this but an accountant might be good

[Londoner]

Yes but not all accountants are good and not all accountants are cheap. Some are neither. Finding a good one is like trying to find a needle in a haystack.

[mark dew]

My accountant only charges me for the work he does. Not a set fee for doing the books. I used to pay £150 15 years ago but i only pay £40 now, cos i do most of it now and my accountant just number crunches and adds on more things to claim against.
This same accountant charges my mate £500 but he turns up with a carrier bag full of receipts etc and the accountant has to go through it all and make sense of it.
They don't need to be expensive.

[williamx]

ditto for me too, I do the mileage thing for my van, forgotten exactly how much it is, but you claim so much per mile for the first 10 or 12 thousand miles, and then something like 25p per mile thereafter.
But that includes everything, fuel, servicing, depreciation (or so I believe) lease payments and so on.


Ian

The mileage allowance is 40 pence per mile for the first 4000 miles then its 25 pence per mile thereafter.

If you are leasing a van, then it might be more better to claim capital allowances which is 100% of your vechicle costs.

Remember though you have to stay on the same tax allowance scheme, you can only change this if you aquire a different vechicle.