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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 7290
Experience:  FCCA FCMA CGMA ACIS
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I am a smallish sole trader, turnover £72000. I have a

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I am a smallish sole trader, turnover £72000. I have a question about bookkeeping for asset sales. In the past I have purchased equipment and used AIA to account for them for tax reduction in that year. I then did not keep a balance sheet item to record my assets, as I was not required to do a balance sheet at all. After several years I am about to sell some of them. My software advises doing complicated asset journal entries to account for depreciation which I never used before. If I sold anything I'd just record the sale as income for tax purposes. Is this ok to do as I know my accounts won't reflect my asset position but my tax should be correct at the end of the year. I know there is a "box 26" on the self assessment return for this but does it matter if I use it or not as long as I am paying the right tax...
JA: What are the assets here? Are they current or long-term assets?
Customer: Computer equipment over £150 each item.
JA: Anything else you want the Accountant to know before I connect you?
Customer: As long as I have all my records of asset sales and purchases does it matter which box of the self assessment form they go in to reflect any income from the sale?

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

 

Were att these AIA entries at 100%?

Customer: replied 1 month ago.
Yes I claimed 100% tax rebate in the year purchased using the self assessment form. I think my accountant at the time reduced the amount claimed by an amount of any asset I'd claimed AIA for that I sold in that year

Your accountant's action was quite correct. All you have to do if you sell an asset on which you received an AIA of 100% is to include the sum received as a balancing charge which is what was done by your accountant earlier.

I would like to talk to you; from long experience, however, I think yoi will find it easier to ring me; I am on 01750 725420.

bigduckontax and 2 other Tax Specialists are ready to help you

I think we covered everything in the telephone call.

 

Thank you for your support.