Capital Allowances and the AIA

[ContrataxLtd]

Hi All.

Some of you may know about capital allowances and the annual investment allowance. Well it has recently been changed to be 100% allowance for up to 500k!

So my company has a few different businesses in it.

I am currently planning on spending about £160k on "plant" (charter yachts).

If I claim the whole AIA on 160k i will make a pretty good loss. Is that even possible with the AIA?

Never having made a loss before I don't know what the implications of carrying a loss forward are and whether there is any immediate rebate available on previous years profits.

I think I finally need a good accountant! Things are getting complicated. haha.

Hi Prozak

Probably is a good time to find a good accountant, sounds like there is a bit of tax planning that you could do to ensure things are done as efficiently as possible from a tax point of view given the large purchase.

On a general note, it is possible to make a 'tax loss' by utilizing the AIA with capital purchases so this then begs the question of what to do with it. You may be able to carry it back to last years figures and secure a refund of corporation tax paid or you may want to carry it forward to offset against future profits. Either option has it's own benefits so does need discussing with an accountant that knows the whole picture.

Hope this gives you some food for thought.

Martin
Contratax Ltd

[prozak]

Or put another way, is this a 'can I buy a yacht with company money and claim it as a business expense' question. Given that for 160k you could maybe get half a Lagoon 440, I doubt you would get many reasonable charter yachts for that price

Nope.

The question is as asked. I run a yacht charter business and have done so since incorporation.

[tractor]

...

Hi All.

Some of you may know about capital allowances and the annual investment allowance. Well it has recently been changed to be 100% allowance for up to 500k!

So my company has a few different businesses in it.

I am currently planning on spending about £160k on "plant" (charter yachts).

If I claim the whole AIA on 160k i will make a pretty good loss. Is that even possible with the AIA?

Never having made a loss before I don't know what the implications of carrying a loss forward are and whether there is any immediate rebate available on previous years profits.

I think I finally need a good accountant! Things are getting complicated. haha.

Or put another way, is this a 'can I buy a yacht with company money and claim it as a business expense' question. Given that for 160k you could maybe get half a Lagoon 440, I doubt you would get many reasonable charter yachts for that price

[prozak]

Hi All.

Some of you may know about capital allowances and the annual investment allowance. Well it has recently been changed to be 100% allowance for up to 500k!

So my company has a few different businesses in it.

I am currently planning on spending about £160k on "plant" (charter yachts).

If I claim the whole AIA on 160k i will make a pretty good loss. Is that even possible with the AIA?

Never having made a loss before I don't know what the implications of carrying a loss forward are and whether there is any immediate rebate available on previous years profits.

I think I finally need a good accountant! Things are getting complicated. haha.