Capital depreciation and AiA capital allowance

[zappakat]

Afternoon,

Just wondering what's the difference between the two?

I was under the impression that for example IT kit that my company purchased was written off at the end of the financial year provided it was under the threshold as per this link:-
https://www.gov.uk/capital-allowance...ment-allowance

I also not that my accountant does not appear to keep track of kit previously purchased on the company spreadsheet so this seems to back it up.

However whilst searching this site I see quite a few comments talking about capital depreciation at 1/3 of the item's value per annum.

So which one is correct?

[Alan @ BroomeAffinity]

Both. Depreciation and AIA are completely different things. Depreciation is an accounting method to charge the cost of an asset over its life. AIA is how you get tax relief on the cost of the purchase. Not sure what you mean my "company spreadsheet" but if it doesn't appear on balance sheet he's probably written it off via p&l. Not entirely correct but the tax relief is the same.

[Louisa@InTouch]

The depreciation will be shown on the accounts. If you purchased an asset for £900, which is depreciated at 33% straight line; £300 of depreciation would be charged each year in the accounts.
(Unless the asset was disposed of beforehand).

However capital allowances will be shown on the CT600. If you purchased an asset for £900, the full amount will qualify for AIA. The full cost will then reduce the profits for the year and you will have the corporation tax relief in the year of purchase.