Capital allowances augment a loss. In certain circumstances it may be better not to claim the allowances as this may preserve personal allowances. This strategy will allow higher allowances to be claimed in later years when profits are higher.
Example:
Polly makes a loss of £18,000 in the second year of her business. The loss includes capital allowances of £8,000. She has other income of £20,000 in the same year.
By not claiming capital allowances, the loss is reduced to £10,000. She can set that against her other income without wasting her personal allowance. Had she claimed capital allowances, she would have wasted much of her personal allowance.
By not claiming the capital allowances now, higher allowances will be available in future years when profits may be higher.
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