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Disallowable expenses

On my self assessment tax form, I have entered in my figures in the Depreciation boxes 3.44 and 3.62. They are identical as I have to use capital allowances instead.

I presume I would normally use the figure in box 3.62 and copy that to box

3.16, yes?

e.g. I have 4,000 in the above mentioned boxes. 4,000 goes in box 3.16 I am assuming. But what if you have 1,000 of the above figure that is for private use? Do you just knock it down to 3,000, and put that reduced figure in box 3.16? And still leave the 4,000 in boxes 3.62 and 3.44?

I am assuming this would account for the private element.

Regards,

Jon

Reply to
Jon
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Not normally, no. But if your depreciation policy is to use the same recipe as is used for capital allowances, then yes.

If there is a private element (we're not talking about cars, are we, as they would go in 3.14 -- the magic £3k figure seems to suggest it might in fact be a car), then you're right that it should not be part of the total appearing in 3.16, but strictly speaking it should not really be in 3.44/3.62 either.

For tax purposes it doesn't really make any difference whether 3.44 and 3.62 are both bigger or smaller by the same amount as they cancel out anyway, but for your own purposes you'll want to be clear whether you consider the asset as entirely owned by the business or partly by yourself. If the latter, you ought to be "co-funding" the depreciation, as it were.

Reply to
Ronald Raygun

"Ronald Raygun" wrote

If it were a car, wouldn't the figures probably be 3000 (total) & 750 (private use) - rather than 4000 (total) & 1000 (private use) ?

Reply to
Tim

Why should the car not be in 3.44 or 3.62? The car's value is about 6,000.

3.14 only seems to be for cars worth over 12K.

J>

Reply to
Jon

You misunderstood. I meant the private element shouldn't be there.

You're right, 3.14 is only for expensive cars. But you can't claim £3k for a £6k car. The max is 25%, so you can only claim £3k for the car if it's worth £12k, and then only if there's no private use. The only way you can put £3k into 3.16 is if your CAs relate to other assets in addition to the car.

Specifically, if the car's worth £6k, you can only write it down by £1500, and if there's 25% private use, then you can only claim £1125, so you can only jack 3.16 up to £3k if you can find extra CAs to the tune of £1875.

Reply to
Ronald Raygun

You're getting confused!

You have to decide what to put in box 3.62 first. What is business expenditure? Say you have bought an asset for 16,000 and you are depreciating at 25% a year then you would have depreciation of 4,000 but 1,000 would not be business expenditure. Therefore, you would put only 3,000 in box 3.62.

Of that 3,000 all of it is not allowable so you put 3,000 in box 3.44.

Reply to
Peter Saxton

They're not mutually exclusive!

One is for capital allowances and the other two are mainly for depreciation.

Reply to
Peter Saxton

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