Can i do this?

David_Young_4

Hi im looking for some adive>>>>>I have just got my tax bill through, and the tax i owe for 2009-2010 can i buy machinery for my workshop and deduct it from my tax bill or will i have to wait to my nex tax return......Thanks

fengirl_2

The tax bill you have just received must be for 2008/09 as 2009/10 has not yet finished. You can buy plant or machinery this financial year which will reduce your tax bill for this year, but it cannot be carried back to a previous year.

David_Young_4

The period im talking of is 2009-2010 the advance payment due by the end of january 2010, and not the payment due by junuary 2010 for the tax period 2008-2009.......Hope thats clear enough.....i get tied up with the years....age doesnt come itself.

ViolaLass

I assume OP means that the bill is the 50% advance payment for next year's tax bill.

Sorry, don't know the answer though. Probably quickest to call the tax office as I know you can get the advance payment changed (I got mine cancelled altogether as I told them I didn't expect to have to pay any tax next year). If you give them revised figures for what you expect next year's tax liability to be, they may allow you to lower the advance payment.

(all this assuming you are SE)

fengirl_2

Yes, you can apply to reduce your payment on account of this year's tax if you think your tax bill will be lower. Be aware though that interest is charged if it later turns out that the tax was due.

PlutoinCapricorn

I am confused about how this will help, as machinery must be depreciated over a period of years, and you will still need to spend money to buy it. Also, a proportion of the cost will be deducted from your income (not your tax bill) each year to arrive at your profit, which is what you will be taxed on.

Perhaps if you could post some figures the tax experts on here could advise whether or not this is really a good idea.

mrkbrrws

If you were going to buy the machinery anyway, it might be advantageous to do it before your year-end in 2009/10. There is an 100% Annual Investment Allowance up to £50,000 expenditure, so it could significantly reduce profits.