Date: Mon, 16 Jan 2006 13:11:06 +0000
From: Reestit Mutton 
Newsgroups: uk.finance
Subject: Re: 04/05 tax return

Hi Ronald,

Thanks for the response...replies interspersed below:

Ronald Raygun wrote:

> 
> Was this "other purpose" a business?  If so, and you chose not to bother
> claiming capital allowances for the equipment in that business before
> transferring it into the current business, then you could probably
> treat the equipment as introduced at its original purchase cost.  If not,
> i.e. the purpose was private, it might be more honest to introduce it at
> market value.
> 

'twas for personal use.
Question is...if I were to be more honest and go with market value, how 
do I ascertain this at this point (some 12-18 months later)?

> 
> You don't "account for depreciation" at all, except for your own
> internal purposes if you wish.  For tax purposes, you claim capital
> allowances instead.  You refer to them below as depreciation allowances
> and you may like to think of them as being just that, however, the
> correct name for them is capital allowances.
> 

okeydoke...I'll make a mental note not to try not to confuse terminology.

> 
> Not sure.  I suspect FYA on computing stuff (40%) are only available if
> the equipment was bought new in the year of claim.  This would mean you
> could only claim 25% CA.  And then 25% of 75% next year and so on.
> 

Does anyone have a definitive on this?...or is it much like most of the 
rest of the tax system where no definitive answer exists i.e. it's just 
down to testing the boundaries on a case by case basis?

>>
>>If my earnings were, say, £10,000, would class 4 NI liability be £420.40
>>(8% on the earnings above £4745) or £800 (8% on all earnings)?
> 
> 
> The former.
> 

Cheers.

> 
> I don't think the small earnings exception is pro-rated, and so that
> would mean that provided the earnings in the tax year were below it,
> you would not be required to pay class 2 NI.  But it doesn't necessarily
> mean you'd be exempted from notifying IR of your SE status.
> 

Thanks. I'm not looking for a way out, just a handle on the size of the 
underpayment.

cheers
RM
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