Help drafting a response to HMRC concerning capital spent building a website
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Description
Experience Level: Intermediate
General information for the business: I need some basic advice about AIA, capital allowance R&D etc
Industry: Business
Kind of support: End of year account, Tax
Description of support work: I have an ongoing dispute with HMRC
Basicly I commissioned a website to be built, the site once finished will be "the business" and all income will be derived from the website.
I am a Sole Trader and so i assumed with basic knowledge that as a soul trader all income from various sources are treated as one income and all capital expenditure treated as one also. Therefore i put the £40k costs through as Annual Investment Allowance.
However, HMRC have taken a different view, they say that as the website is not in line with my normal trading activity then the website should be treated as a separate entity for tax calculations.
This means that any expenditure should be offset against the web site business once it starts trading and because the expense was incurred before the business started trading the claim for AIA has been overruled on the grounds that the rules say it can only come into effect on the first day that the business starts to trade. Which it has not. Yet!
So, my question then is what to do about this :)
I have done some reading and i'm of the opinion that it maybe better to go with a Capital Allowance Research and Development, however, i don't really trust my knowledge here and would like to just talk through the option available.
Extra notes:
Industry: Business
Kind of support: End of year account, Tax
Description of support work: I have an ongoing dispute with HMRC
Basicly I commissioned a website to be built, the site once finished will be "the business" and all income will be derived from the website.
I am a Sole Trader and so i assumed with basic knowledge that as a soul trader all income from various sources are treated as one income and all capital expenditure treated as one also. Therefore i put the £40k costs through as Annual Investment Allowance.
However, HMRC have taken a different view, they say that as the website is not in line with my normal trading activity then the website should be treated as a separate entity for tax calculations.
This means that any expenditure should be offset against the web site business once it starts trading and because the expense was incurred before the business started trading the claim for AIA has been overruled on the grounds that the rules say it can only come into effect on the first day that the business starts to trade. Which it has not. Yet!
So, my question then is what to do about this :)
I have done some reading and i'm of the opinion that it maybe better to go with a Capital Allowance Research and Development, however, i don't really trust my knowledge here and would like to just talk through the option available.
Extra notes:
Aaron L.
0% (0)Projects Completed
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Last project
26 Oct 2013
United Kingdom
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