UK tax help

Capital allowances

Capital allowance sheets calculate allowances, balancing allowances, and balancing charges for each pool or asset type within a business, enabling accurate tax computations across single and multiple accounting periods.

Overview

These sheets calculate capital allowances, balancing allowances, and balancing charges for tax purposes. The
Capital allowance summary
 sheet is created by inserting a
Business-trade or property
 sheet or a
Business-investment
 sheet.
A sheet is created for each capital allowance pool or type, per business. If there are multiple accounting periods, extra columns are added for each period. For the
Capital allowance summary
 and Annual investment allowance sheets, a new sheet is created for each period.

Capital allowance summary

This sheet summarises the capital allowances, balancing allowances, and balancing charges for a business. It covers the following pools and types:
  • Main pool
  • Super-deduction expenditure
  • Special rate pool
  • SR allowance expenditure
  • Short life assets
  • Other allowances
  • Annual investment allowance
  • Parent and Know how allowances
  • Mineral extraction allowances
  • Structures and buildings allowances
  • R&D allowances
  • Ships allowances
Once the sheet is set up, no further manual entry is needed.

Completing the Sheets

To allocate capital expenditure to a pool or type, insert the relevant sheet from the
Insert sheet
 menu. Additions are brought in automatically from the
Additions analysis
 sheet. Allowances are then calculated and sent to the
Capital allowance summary
 sheet.
Enter any brought-forward amounts manually when the computation is first created. These transfer forward automatically for later periods, less any writing down allowances and other movements. You can also choose not to claim writing down allowances using the data entry cells provided.
Additional information for specific capital allowance sheets:

Super-deduction expenditure

This sheet is inserted at the same time as the
Main pool
 sheet. Assets transferred in or out under a
Transfer of trade
 need to be entered manually. Don’t enter a disposal value for any assets transferred out.

SR allowance expenditure

This sheet is inserted at the same time as the
Special rate pool
 sheet. Assets transferred in or out under a
Transfer of trade
 need to be entered manually. Don’t enter a disposal value for any assets transferred out.
Short Life Assets
Where elections were made, this sheet lets you reduce the write-down period for an asset (SP 1/86 example 1). It also handles cases where small items of the same type are pooled together (SP 1/86 example 2).
Mineral Extraction Allowances
For each asset, select a writing down rate of either 10% or 25%. This applies to assets entered manually at setup and to additions in the period. The selected rate transfers forward automatically.
Structures and Buildings Allowances
For each structure or building, enter the
Date first brought into use
 and
Original expenditure
. These are required for allowances to be calculated correctly.
R&D Allowances
Allowances of up to 100% are available. Any allowance disclaimed in the 1st period can't be claimed in future periods. Enter the
Expenditure on which RDA claimed
 and
Original expenditure
 for each row. No allowance is calculated without these. This sheet is not for investment businesses.
Annual Investment Allowance
This is a review sheet only. Amounts are populated automatically and reflect the eligible expenditure and annual investment allowance claimed.
Ships allowances
For each asset, select a writing down rate of 18% (Main pool), 6% (Special rate pool), or 10% (Overseas leased assets). This applies to assets entered manually at setup and to additions in the period. The rate transfers forward automatically. Postponed allowances are tracked in the
Ships allowances postponed
 sheet.

Transfer of trade

If a transfer of trade involves a transfer of assets, insert separate sheets depending on whether assets are being transferred to or from the company. These sheets add separate rows to the capital allowance sheets. For more details, refer to the
Transfer of trade
 help sheet.

This article applies to:

  • Product: ONESOURCE Corporate Tax

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