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Expensive car leasing |
See Also
Adjustment of profit | Expense analysis | Expenses of management | Profit and loss account / Income statement (D schedule) | Schedule A income/(losses) | Working with Foreign Currencies
Select from the following headings:
Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors
This schedule calculates the non-deductible element of expensive car leasing costs. The software will make any disallowance automatically within the schedule and uses the following formula to compute the disallowable leasing costs (where 'A' is the cost of the car)
| 0.5 x (A - 12K) x | Rental Charge |
| A |
It can be created from the Profit and loss account or any Expense analysis schedule, using Develop, Leasing, Expensive car leasing or Develop, Link, Expensive car leasing. The schedule can only be developed once from one of these places.
Using the Develop, Link option, a reconciliation to the P&L amounts will automatically be populated at the bottom of the expensive car schedule. A check error will persist until the expensive car details are entered.
The Develop, Leasing option can be used where you want to populate the schedule with the expensive car leasing details before ensuring it all reconciles back to the P&L. Once the items do reconcile to the P&L, you should then link the P & L amount to the expensive car schedule using the Develop, Link option.
Note: Only one of an expensive car leasing schedule or a multiple car leasing schedule should be developed, not both. You should decide which schedule is more appropriate.
The schedule is tabular, providing a row for each car. Additional rows can be inserted as required by use of the Ins key. Columns are provided for registration number, original cost, lease payments and rebates, maintenance element of lease payments and disallowable amount.
To enter a lease payment into the Leasing Payment/(rebate) column, you should enter the figure as a positive amount. To enter a rebate, you should enter the figure as a negative amount.
Maintenance costs which do not give rise to a disallowable element should be entered as negatives in this column. Where lease rebates are entered the maintenance cost element would normally be positive
This disallowable amount is calculated by the system based on the lease payments net of the maintenance element.
Under the Finance Act 2000 provisions capital allowances can be in foreign currency, which also includes the 12,000 leasing limit. FA 2000 (Clause 94) allows either the average rate to be used or the rate ruling at the time of the transaction as reflected in the schedule
For 2007 files onwards, this schedule includes a reconciliation to the P&L. If the schedule has been developed from using the Develop, Link option, the amount from the expense analysis schedule will automatically link through to this reconciliation. If the Develop, Leasing option has been used then the reconciliation needs to be completed manually.
Investment companies
For 2006 and earlier periods, the expensive car leasing schedule can be developed from any expense analysis using Develop, Leasing, Expensive car leasing.
The investment company schedule is similar to that of a trading company. In the investment company version, the net amount allowable is treated as an expense of management.
For 2007 and subsequent periods, the ?allowable? amount is automatically posted to the A schedule as an expense of management. For earlier builds of the software, this adjustment will need to be made manually.
Long periods of account
The same schedule will be displayed where there is a long period of account.
Foreign currency computations
If the computation is using a foreign currency, you may enter a currency formula (for example, @$1.4) in the Exchange rate column. Otherwise, you may find that currency conversion errors appear in the computation.
For more information on using foreign currencies in computations, see Working with foreign currencies.
The schedule has no standard sub-schedules.
Where a new period is built, costs and registration numbers are automatically carried forward per the Expensive car leasing schedule.
© 2009 Thomson Reuters.