Using Figurewizard - Fixed Asset Budgets

How the budgets for fixed assets, depreciation and asset financing are calculated.

Fixed Assets and VAT

Figurewizard calculates all VAT transactions, so all values including those for fixed assets are entered into the form excluding VAT with one exception - company cars. VAT cannot be reclaimed on the purchase of company cars and by the same token VAT is not required to be charged when they are sold on.

Budgeting Fixed Asset Forecasts

Your forecast figures for both the the purchase and sale of fixed assets are budgeted. For example if you enter £6,000 for the cost of main fixed asset, this is calculated by our system as £500 a month for twelve months.

Budgeting Fixed Asset Financing

Asset financing is forecast in the same way, so if you enter 60% as the average proportion of financing for £6,000 of new assets. twelve transactions of £300 are calculated with repayments and interest charges calculated in line with that.

Budgeting Depreciation

The same procedure is adopted for depreciation as for financing, meaning that if depreciation is set at 25% on a £6,000 asset it will be will be rounded to £10 in the first month i.e. 500 x (25%/12) x1 = 10.417; £21 in month 2 and so on for twelve months.

Why Fixed Assets are in Pools

In the UK depreciation is not accepted as being a tax deductible overhead by HMRC; capital allowances are applied instead.

The main pool comprises the majority of working assets in a business; for example plant and machinery, fixtures, equipment and commercial vehicles. Some assets such as company cars however are subject to different rates of capital allowance and so are assigned to special pools.

By breaking down new fixed asset purchases into main and cars when you enter them into the form, Figurewizard can then accurately calculate your corporation tax liability.

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