Aia question

Jacksonrtw

Hello everyone,

Just a Corporation Tax query I would like to float.

My scenario:

FRIST YEAR
Profit and Loss = + £4000
Money spent on Equipment (Fixed assets) = £9000

Question:
I can claim Annual investment allowance on the purchased equipment, a potential for £9000 tax relief.
However I only made £4000, meaning £5000 tax relief is unused.
How do I go about claiming that tax relief? Is it lost? Or can it be calculated in the following years return?

I know the number one response is likely to be....GET AN ACCOUNTANT....but any help would be greatly received.

Best,

Paul

pjclar02

Hello there

If you have a profit before AIA of £4,000 and you spend £9,000 on assets qualifying for AIA, this will generate a trading loss of £5,000 which can be carried forward to offset against future profits of the same trade (or can be carried back if you have profits in earlier years)....it will not be lost unless this trade ceases.

Hope this helps.

Murdina

Hi there

Do you mean corporation tax or income tax? if corporation tax ie you have a company you suggest you do not have an accountant. You may well have to have an accountant to do the corporation tax return - they are quite tricky to do now with new rules about format and so on. You just might want to check that out.

http://www.hmrc.gov.uk/ct/ct-online/file-return/switching.htm

(If your loss is an income tax one then you may be able to offset against other income.)

Jacksonrtw

Thanks for the advice PJ - I was slowly arriving at that conclusion myself, so it is nice to have it confirmed!

Cheers for the link Murdina, I'm sure it will come in handy!

Paul