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Greetings, hope you’re doing good!
Please help me understand this tax planning opportunity
If plant is bought just before an accounting date, allowances become available as soon as possible. Alternatively, it may be desirable to claim less than the maximum allowances to even out annual taxable profits and avoid a higher rate of tax in later years.
Thanks a ton in advance!! :))
If an unincorporated trader wants more capital allowances this accounting period as a higher profit has pushed the taxpayer into a higher rate then it may be worthwhile considering bringing forward capital expenditure on qualifying plant and machinery that is planned for next period to this period.
We should also consider of course our cash position and other practical factors – like where will we put it until it is needed?
If a taxpayer does not wish to claim all their capital allowances – possibly to avoid wasting their PA then they can of course just make a reduced claim.
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