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Explain It Like I'm 5: Tax Relief
Comments
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http://www.hmrc.gov.uk/manuals/camanual/CA10040.htm
At your level of business, you don't need to be an expert in depreciation of declining balances.0 -
Owain_Moneysaver wrote: »HMRC have detailed rules about what you can set against tax regarding depreciation of assets. Very simply, if HMRC say the allowed depreciation for your computer is 20% per year:
Wrong, I'm afraid. Depreciation is an accounting term and ignored/added back for tax purposes. Any business is free to choose whatever depreciation they like in their accounts - it doesn't affect tax.
HMRC provide tax relief on asset purchases via their capital allowances rules which are completely different to depreciation and net book values in accounts.
At the moment there's 100% annual investment capital allowance in year of purchase, so you'd get full tax relief in year of purchase for a hypothetical computer.0
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