Capital expenditure /AIA

07/05/2019 11:09:38
Can I confirm how I should be calculating capital expenditure (In my case a laptop and software). I had been calculating 20% over 5 years, then changed to 18% but that takes it to 90% of the cost in 5 years so does year 6 become 10%? And what is AIA and how do I calculate it?
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Re:Capital expenditure /AIA

07/05/2019 13:29:22

Thanks for your question.

I am assuming that as you are claiming writing down allowances for capital expenditure that you are using the traditional accounting method. With traditional accounting the rate at which you write down and claim each year is 18% for the main pool. When the balance in the pool reaches £1000 or below, you can claim the full balance at the one time.

AIA (annual investment allowance) is one of the capital allowances which you can use to claim the full cost of a capital item, within the limits, in the year of purchase. It cannot be used in subsequent years.

I have given you a link to our Capital allowances helpsheet which details the different types of capital allowances and the writing down allowance rates.

Capital allowances and balancing charges: HS252 Self Assessment helpsheet

I hope this helps.

Capital expenditure /AIA

07/05/2019 14:42:05
Year 6 is the remaining balance BUT if the pool of expenditure has been written down to less than £1,000 you can write off the whole balance. It is likely that you have already reached this point.

AIA allows you write off the entire purchase in the year of purchase. It would not apply to any vehicle that is not classed as a commercial vehicle.