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Background

The purpose of this schedule is to allow the user to identify separately assets which are to be treated as short life assets. 

The Plant and Machinery general pool aggregates all additions and disposals qualifying as Plant or Machinery. Writing Down Allowances are calculated on the balance of the pool. One consequence of this pooling is that under normal circumstances the pool does not give rise to balancing adjustments (either charge or allowance). 

Short Life Assets (SLAs) can be used to overcome this problem. Items qualifying as Plant and Machinery can be separately identified and a de-pooling election made to treat them as SLAs. If a short life asset is disposed of within the period covered by the election a balancing adjustment will arise. Otherwise, if it is not disposed of the unrelieved tax written down value will is transferred back into the general pool after four / eight years.

This schedule has been designed to cope with fungible assets. Where it is not practicable to maintain capital allowance computations for each and every short life asset, and the Inspector is satisfied that the average life of a class of assets is less than five years (or nine years from Financial Year 2011), computations may be made on a reduced average life basis (IRSP1/86) where the items are grouped together (it is not essential that each of the items within the group costs exactly the same as long as the amounts are broadly similar). 

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Developing the schedule

This schedule can be developed from the C schedule using the Develop menu and Short Life Assets.

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Completing the schedule

Some of the entry cells are described in more detail below:

Accounting period of acquisition

When a row is first used, the accounting period of acquisition is shown by the system as a December period end; this can be edited if it is necessary to show the actual accounting period end.

Description

The user must enter the description of the assets.

Agreed average life (years)/Deemed disposal date

From the average life of the assets the system calculates the deemed disposal date with the balancing allowance or charge being given in the period of the deemed disposal. Please note, only the whole number of years are used in computing the deemed disposal date and fractions of a year are ignored.

In this case, the user should review the disposal date calculated by the system to ensure that the balancing allowance or charge is taken into account in the appropriate accounting period. If the Deemed disposal date needs to be amended, this can be amended by the user.

FYAs Y/N/ Rate for FYAs

For periods where FYAs are relevant, the user should use the Y/N indicator as to whether additions qualify for FYAs. FYAs may be disclaimed by adjusting the FYA percentage rate. Some guidance to this effect is given at the foot of the schedule. The rate of FYAs can also be amended by entering the appropriate percentage expressed as a decimal.

TWDV b/f

If this is the first period for the computation to be prepared using the software, enter the tax written down value brought forward for the period.

Additions

Where additions have been charged to Profit and Loss account, the amount expensed can be entered in the field provided at the foot of the Additions column to reconcile the additions to the analysis of fixed asset movements (see Fixed assets). Please note additions and disposals in this schedule also apply to part disposals of grouped short life assets.

(Proceeds)

Any applicable proceeds are entered by the user in the column provided with a leading minus.

Allowances waived

In order to disclaim WDAs, enter the amount disclaimed in the field for Allowances 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.

CAA 2001 s220

Any expenditure restricted under CAA 2001 s220, which is available for carry forward and inclusion within the next accounting period under CAA 2001 s220 , will be shown as a memorandum entry towards the foot of the schedule.

'Hybrid' rates of WDA

Where the rate of WDA changes between financial years and a 'hybrid rate' is required to be applied, the software calculates the relevant rate and displays this. Note that this will not display or print in the final version.

A data entry cell is provided to allow for the rate to be overridden if required, and for clarity the rate of WDA applied is also displayed.

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Standard sub-schedules

This schedule has no standard sub-schedules. 

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Carry forward

The system carries forward the SLA pool when a new period is built. 

Once the de-pooling election ceases to have an effect, the tax written down value at this date is transferred into the Plant and Machinery general pool.

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Related errors

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