Capital allowances - theory question

Always100FC

can any accountants help with a bit of theory please?

i've been going through IATI past paper examiners answers, and am slightly confused

my understanding of capital allowances is:
Schedule D case1 net profit
add back depn
deduct capital allowance

however in summer 2005 paper http://www.iati.ie/Examinations/Past_Papers/Admission/ the examiner is adding capital allowance??
surely this is a mistake?

i'd ask someone in work or class, but i'm off both for study!
thanks

Always100FC

Thanks for reply jimmo

Sorry, my sense of direction is worse than my sense of humour!

yeah, Paper - Taxation2 (N.I.) Summer 2005
Question 5 - answer states "deduct cap allowances" yet he's adding it?!
446,880
42,600
489,480 - should read - 404,280


Anyway, i know my theory, so i won't get hung up on it.

Would you have any advice on considering Tax Inspection as a career move. Once i've finished IATI (equivilent to AAT) i am considering my options for the road ahead, and liking tax the best i'd consider specialising in this area
Cheers

reddevilled

Yeah, looks like they've made a mistake there. It definately should be deducted from the DI pre CAs. The only reason you'd add it is if the balancing charges in the year were higher than the balancing allowances / writing down allowances.

Murdina

Re your career query you need to look into what further qualifications you might have to take if you joined HMRC. In my day external qualifications did not seem to count for much so you had to study again but this has changed. Think also about what sort of tax you would like to do as it is an increasingly specialised area and once you get sucked down one route eg corporate/big companies or family owned businesses and find you do not like it not so easy to move out into another.

pchelpman

Yes, agreed, mistake in the answer. CAs are to be deducted from profits (or added to losses).

Small point ... .remember that, for non-corporate organizations (e.g. the self employed) the old "schedular" system has gone. Initially all replaced in ITTOIA 2005 so the terminology in the exam papers may be different now to what it was in past papers.

On a future in tax ... IMO the best route to "expert" tax status is the ATT then CIOT (but I'm biased).

Student information on the websites here ....

ATT > http://www.att.org.uk/showarticle.pl?id=4;n=200

CIOT > http://www.tax.org.uk/showarticle.pl?id=3242;n=10200.


Best wishes for whatever you choose.

Always100FC

jimmo wrote: »

My gut reaction is to say stay out of the civil service, the rewards look so much better in the private sector. But I stayed for the best part of 40 years so its not all bad.

Good advice, but too late for me i'm afraid!

Been civil servant for 2 years now, just went on my first EO1 board yesterday as it happens! Fingers crossed i get it, as i feel i'm worthy of it, and it's time to develop new skills.

Always100FC

Cheers everyone for your advice

Think i'll get exams over me first before i look into anything else, just yet.
In saying that i did look at ATT and CIOT and they didn't look overly taxing.
Anyway, as i said, when i've a bit more time i'll research things like exemptions etc.

I never though i'd ever hear myself say i found tax interesting!!

pchelpman

Always100FC wrote: »

i did look at ATT and CIOT and they didn't look overly taxing.

:shocked: Someone has a big shock awaiting them .....

Bean_Counter

pchelpman wrote: »

:shocked: Someone has a big shock awaiting them .....

How right you are!!! I thought about doing the CIOT after I got my CA, but when I saw people a lot smarter than me really struggle, and the low pay rates (at that time at least), I changed my mind.