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Hello sir/maam, I have a question regarding a question on BPP F6 TX-UK Workbook regarding capital allowances. Here is the question:
J&O Ltd purchased the following during year ended 31 March 2023
1 June 2022: Machinery £400,000
31 July 2022: Special Rate Expenditure £1,250,000
The TWDV of main pool at 1 April 2022 was £500,000
Calculate the maximum capital allowances for the year ended 31 March 2023The answer key resulted in a total capital allowances of £1,735,000:
Main Pool WDA £90,000 [£500,000*18%]
FYA 130% £520,000 [£400,000*130%]
AIA £1,000,000
FYA 50% 125,000 [(1,250,000-1,000,000)*50%]Meanwhile I found the total capital allowances of £1,742,500:
Special Rate Pool WDA £7,500 [£125,000*6%]
Main Pool WDA £90,000 [£500,000*18%]
FYA 130% £520,000 [£400,000*130%]
AIA £1,000,000
FYA 50% 125,000 [(1,250,000-1,000,000)*50%]Can you help me shed a light on why there is no writing down allowances on the special rate pool after applying the FYA and AIA, although there is a balance of £125,000 inside the special rate pool. Is this a rule? or an error made by the publisher of the book? Thank you in advance
Firstly, I dont have access to BPP manual or exam kit
But from your question and the information you provided I agree with you, but Like I said, without the manual I cannot give a definite answer.The lesson to learn from this – It is vitally important that you show ALL your workings so that the examiner/marker can give you credit for everything that you get right.
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