FOUR ELMS BOOKKEEPING

Bookkeeper serving Yeovil, Sherborne, Langport, Wincanton, Somerton and surrounding areas of South Somerset and West Dorset.


Summary of Capital Allowances available in force from April 2012 to 31st December 2012


The following capital expenditure may be deducted from income in calculating taxable profits:

Capital Allowance writing down rates have changed since the last tax year. Hybrid rates will apply for accounting years which span the two tax years.

The above rates apply to companies whose accounting year chargeable to tax ends on or after 1 April 2012 and to sole traders or partners whose accounting year ends on or after 6 April 2012. Where accounting years span the tax years 2011/12 and 2012/13 hybrid rates will apply for the calculation of writing down allowances (WDA) in the Main Pool and the Special Rate Pool. This is because the rates applicable to these pools have decreased from the last tax year. In 2011/12 the Main Rate was 20% and the Special Rate Pool was 10%. In 2012/13 these fell to 18% and 8% respectively. The hybrid rate is calculated by working out the proportion of the accounting year falling within the earlier tax year, and the remaining proportion falling in the later tax year, then working out the weighted average. The changeover date for the rates was 6th April 2012 for sole traders and partners paying Income Tax, and 1st April 2012 for Corporation Tax.

The maximum Annual Investment Allowance has changed since the last tax year. A hybrid maximum allowance will apply for accounting years which started before April 2012 or ended after December 2012.

The hybrid maximum allowance is calculated by working out the proportion of the accounting year falling within the earlier tax or calendar year, and the remaining proportion falling in the later tax or calendar year, then working out the weighted average of the two maximum annual investment allowances: 100,000 was the AIA for the tax year (2011/12), 25,000 was the AIA for the nine month period April to December 2012 while a higher rate of 25,000 applies to the 15 month period from 1st January 2013 to April 2014. The changeover date for the 2012 rate was 6th April 2012 for sole traders and partners paying Income Tax, and 1st April 2012 for Corporation Tax.

For help with self-assessment tax contact Four Elms Bookkeeping.

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