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Dear tutor,
Firstly why did we treat Machinery £45 as Main pool and not S.R? IS it because it did not fit into criteria you gave earlier in the 4 steps – includes Long life asset (machinery might be a LLA, although not specified in this example) or an integral building feature?
Also I would like to know if Purchased machinery had been £180 instead of £45 how would we deal with this.
Because then we would have £180 + £230 for AIA total £410.
How do we then allocate?
Would we Allocate £200 as in this example to AIA or the £180 as AIA , how is this decision made?
I have watched lectures, still a little confused.
Many thanks
Plant & Machinery should be treated as main pool assets UNLESS it is one of those assets listed as belonging to the special rate pool.
It would not matter whether the plant machinery cost 45K or 180K because we always allocate AIA to special rate pool before main pool as per course notes p.31 paragraph before section 4 special rate poolHi again,
“If expenditure exceeds the AIA limit, the AIA should be allocated firstly to special rate (s.p.)”
This to me means, if it exceeds the £200k limit then anything left over should go to special rate?
This is why I am confused by above, you say that it should be treated as m.p and not s.r?
Can you please explain your quote above and when it applies?
Maybe it is the wording, could you please try to explain it in a different way?
Hi I think I have been confusing myself.
I thought applying to s.r was after the £200k limit had been exceeded.
But I think you mean if we identify that it will exceed £200k, then we should assign it first to the s.r. to enable better allowance on m.p items that will be outside the £200k.
Thanks
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