29 June 2006
My client purchased plant and machinery for £100,000. He was entitled to first year allowances and I duly claimed £40,000 in the year of purchase. In the second year he sold these assets for £90,000. I realise that he has had the benefit of tax relief on £40,000, but I have a suspicion that he is not going to be happy when I have to tell him that he has a balancing charge of £30,000. Or does he?
In the second year he has spent £50,000 on more plant and machinery and again qualifies for a first year allowance.
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