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A limited company which has a year end of 31 March 2008 placed two orders for loading shovels on 7 and 20 February 2008 respectively. We have seen copies of the orders which could not be cancelled once the order had been processed (this took only a few days).
The goods were delivered on 22 April 2008 and 20 June 2008. We considered that when the order was placed there was an unconditional obligation to pay and we have claimed the capital allowances in the financial year ended 31 March 2008.
The loading shovels are not kept as stock items by the supplier and had to be ordered in advance of the supplier being able to fulfil the order. The client placed the orders in advance of the year end and they had sufficient profit within the year to justify the purchase of the equipment which they paid...
