AIA on a van - carry forward all/part

Not_Scammed

I have a question regarding my van and what I can claim for.

I bought the van in Feb 14 for £11500 net of VAT. Before I even try to claim the Annual Investment Allowance (AIA) relief on that, the HMRC self assesment website shows that I didn't make enough profit in 2013/14 to pay imcome tax.

How am I able to carry over the AIA relief into 2014/15?

Thanks

purdyoaten

You won't - it will instead form part of the general pool - claim restricted to 18% per year on a reducing balance

chrismac1

Note that capital allowances do not have to be claimed. So in this case it is sensible not to claim any in this tax return.

Not_Scammed

chrismac1 wrote: »

Note that capital allowances do not have to be claimed. So in this case it is sensible not to claim any in this tax return.

Thanks, but does that mean I would then claim on WDA for the van for the ongoing years? Seems a bit harsh as it's only 18% where as the old system used to be 40% year one, the 25% on following years.

purdyoaten

It is harsh. Well done for realising that you could be wasting personal allowances though. What is your taxable profit before claiming AIA?

Not_Scammed

Having spent a few hours looking at different ways of dealing with this I have decided to run the new van in the same way as it's predecessor. Mileage allowance.

I cover over 100,000 miles a year (long distance light haulage) so overall I'll be claiming £27,000 tax (10,000 miles @ 45p + 90,000 miles at 25p) allowance each and every year.

As the van gets older this allowance will stay the same where as the new depreciation method starts off poor and gets worse each year.

Thanks for your guidance.

purdyoaten

Not_Scammed wrote: »

Having spent a few hours looking at different ways of dealing with this I have decided to run the new van in the same way as it's predecessor. Mileage allowance.

I cover over 100,000 miles a year (long distance light haulage) so overall I'll be claiming £27,000 tax (10,000 miles @ 45p + 90,000 miles at 25p) allowance each and every year.

As the van gets older this allowance will stay the same where as the new depreciation method starts off poor and gets worse each year.

Thanks for your guidance.

Actually you won't. You will be reducing your profit by £27000 and will save the tax on that. However, you may not even do that as you would clearly be creating a loss. What do you intend to do regarding the claiming of this loss?

Not_Scammed

purdyoaten wrote: »

Actually you won't. You will be reducing your profit by £27000 and will save the tax on that. However, you may not even do that as you would clearly be creating a loss. What do you intend to do regarding the claiming of this loss?

Sorry for the slow reply.

I hope to be allowed to carry that forward to count against future profits, although on how to do this, I'm open to guidance.

Thanks

purdyoaten

Not_Scammed wrote: »

Sorry for the slow reply.

I hope to be allowed to carry that forward to count against future profits, although on how to do this, I'm open to guidance.

Thanks

You may have another option - what was your profit for 2012/13 tax year?