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Disposals | Fixed assets | IBAs - multi site
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HMRC Manuals - Industrial Buildings Allowance (IBA): Contents
Select from the following headings:
Background | Developing the
schedule | Completing the Schedule | Standard
Sub-Schedules | Carry Forward | Related
Errors
This schedule provides IBA calculations for a single site. Total additions and disposals are reconciled to Fixed Assets (C schedule) and Fixed Assets Disposals (C1 schedule).
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As many copies as are required of the schedule may be obtained using the Develop
option on the IBA multi site schedule;
totals are carried up to the parent schedule.
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Year, Description and Original cost
The user is required to enter for each row, with typically one row per year
of additions, details of the year of acquisition and the qualifying original
cost.
Negative costs and allowances
When there has been an over accrual the schedule will allow entry of a negative
original cost, and calculate corresponding allowances.
Annual WDA rate (override)
The default rate set for writing down allowances (WDA) is set as 4% for
files before FY2012 and 0% for FY2012 files and onwards. This can be altered
as appropriate for old or secondhand buildings. The calculation of writing
down allowances takes account of the length of the period. Where necessary, a
rate for initial allowances can be entered.
Phasing out of industrial buildings allowance
The allowance for industrial buildings is going to be progressively reduced from 1 April 2008 and will be withdrawn from April 2011. Therefore the WDA will be reduced by 25% for FY 2008, 50% for FY 2009, 75% for FY 2010 and will be withdrawn completely thereafter.
Writing down allowances (WDA) waived
By default any writing down allowances (WDA) waived are apportioned across assets automatically. For FY 2005 files and onwards it is possible to manually allocate WDA waived across individual assets by means of a selector on the schedule. Data entry cells will be displayed for this purpose.
Relevant proceeds
In the case of a disposal, the proceeds entered must relate to the whole of
the expenditure on the row concerned. Thus, if there is a part-disposal of an
item of expenditure previously entered on one row, the expenditure should be
split between two rows before processing the disposal. The proceeds entered
should be limited to cost.
Where there have been negative allowances, the proceeds entered must be a positive
amount equal to the cost. As this would only occur if there was a larger positive
allowance for the same buildings, the total correct proceeds can be made up
by entering the correct proceeds plus the opposite amount against this allowance.
Where an industrial building is disposed of a balancing charge/allowance will automatically be calculated. In order to avoid this being calculated, for example where the industrial building is beyond the end of its tax life, set the Relevant proceeds equal, in amount, to the remaining residue. In order for this to reconcile to the Fixed Assets Disposal schedule an equivalent entry will need to be made in the relevant Proceeds if restricted cell.
Balancing allowance/Balancing charge
These are calculated automatically.
Investment companies
The investment company variant of the schedule is identical to the trading
company version, except that allowances are treated as allowances by discharge
or repayment of tax. For long periods of account, the movement is duplicated
for the stub period.
Withdrawal of balancing adjustments
The user should use the balancing ?Withdrawal of balancing adjustments? cell to extinguish any balancing adjustments on the sale of Industrial Buildings.
Please note that, for financial year 2007, the help for the ?Fixed asset timing differences? schedule details the workaround for the deferred tax schedules where deferred tax balances are released to the P&L.
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The schedule has no standard sub-schedules.
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On carry forward, each line in the earlier year will cause a line to be inserted
on the same schedule for the later year. Details of year, cost and rate of writing
down allowance will be transferred, and tax written down values carried forward
and brought forward will be linked.
Totals carried forward and brought forward will be cross-checked.
Rows with disposal values will not be carried forward. Rows with zero residue c/f will be carried forward to the next period and should be mannually deleted when the tax life comes to an end.
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Error | How to
solve it |
| Excess
waiver | This error
occurs when the writing down allowances (WDA) disclaimed are in excess of
the amount of WDAs actually available. Ensure that the WDAs disclaimed are
not in excess of the actual WDAs. |
| Sign error | This error results
from the sign conventions used within the software. This error can be
resolved by clicking the  button.
|
| Allowances
waived should be positive | This error results
from the sign conventions used within the software. Industrial buildings
allowances (IBA) are deducted from the profit before tax to arrive at
profits chargeable to corporation tax. If the allowances waived are entered
as a negative number, this actually increases the IBAs claimed in this
accounting period instead of deferring them until future accounting periods.
This error can be resolved by clicking the button. |
| Remove manually entered values above or select to manually allocate WDA waived | For FY 2005 files and onwards where the user has selected not to manually allocate writing down allowances (WDA) waived but has made manual entries these entries are not relevant and should be removed. |
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© 2009 Thomson Reuters.