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Where Taxpayers and Advisers Meet

Old capital allowances

Tom7000
Posts:74
Joined:Wed Aug 06, 2008 3:30 pm
Old capital allowances

Postby Tom7000 » Thu Feb 22, 2018 3:24 pm

Monkey boy acquired a van 5 years ago in his ltd company and claimed 100% capital allowances on the ''invoice value''.
Turns out its an operating lease and no CAs should be claimed but should have a monthly hire charge in the P and L.

We are doing accounts for the first time

Which option please

a/ Write to HMRC and ask them to change the last 5 years tax calcs, with a note of why.
b/ as above but send in new comps and returns as well
c/ dispose of the van in this years accounts for a figure which balances against the operating lease payments that should have been claimed so overall the expense claim is correct its just a timing issue.

My other worry is... maybe there is a 4 year time limit and maybe they wont change the CAs in year 1 but allow the lease payments years 2- 5 and option c is shooting yourself in the foot? As potentially double tax relief?

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Old capital allowances

Postby pawncob » Thu Feb 22, 2018 7:47 pm

First, do the comps and determine the tax position. If there is no loss of tax, write to HMRC and explain the position, suggesting that sleeping dogs are best left alone.
With a pinch of salt take what I say, but don't exceed your RDA

RMC
Posts:435
Joined:Wed Aug 06, 2008 3:35 pm

Re: Old capital allowances

Postby RMC » Tue Feb 27, 2018 9:54 pm

Ensure that the client pays your fees in advance.


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