Balancing charges on CT600?

[QwertyBerty]

Let's say I bought a laptop for £700 in the last tax year. My capital allowance on that is 50% = £350. But I'm really only using this for work 50% of the time so I believe I ought to (strictly) divide this by half to give £175. So put this in box 107. I then reduce my profits by £175 to save £35 CT.

What should go in Box 108 (balancing charge)? And what exactly do I do with this figure

Thanks,

QB.

[Danbro]

Danbro Accounting Ltd

Let's say I bought a laptop for £700 in the last tax year. My capital allowance on that is 50% = £350. But I'm really only using this for work 50% of the time so I believe I ought to (strictly) divide this by half to give £175. So put this in box 107. I then reduce my profits by £175 to save £35 CT.

What should go in Box 108 (balancing charge)? And what exactly do I do with this figure

Thanks,

QB.

Hi,

You wouldn't go down the route of reducing the capital allowances, your Limited Company can purchase any assets providing they pass the wholly and exclusively necessary test, the tax problem here is that your company will pay Class1a NI on the benefit in kind and you will pay 20% / 40% on the benefit personally, there is no benefit in kind if the private use of the computer is insignificant, however the HMRC appreciate it is difficult to determine what the private us is and if this is significant, they have said that if the computer is a necessary part of the employees duties then the private us is disregarded.

If you go down the benefit in kind route you will be assessed on 20% of the assets original cost as a benefit in kind.

Thanks
Neil

[QwertyBerty]

Cheers Neil. I'll apply 50%.

I think "balancing charges" are only relevant to disposing of assets...?

QB.

[Danbro]

Danbro Accounting Ltd

Cheers Neil. I'll apply 50%.

I think "balancing charges" are only relevant to disposing of assets...?

QB.

Balancing charges occur when you dispose of assets if they are in a seperate pool, they would only occur in a general pool of assets if you cease to trade and clear your assets. Its just the opposite to balancing allowances really.

Thanks
Neil