I spent some spare time last year working on a small personal project. The project took off and later in the year I created a limited company to take it over. This company purchased my original work for £10k, recorded in QF as purchase of an intangible asset. I’m not an accountant but this seemed logical. However as far as I can see QF is not allowing the company any tax relief on this as a capital expense, nor treating it as a business expense. Should I have recorded the expense some other way?
Hi,
I may be able to shed some light on this due to the fact that you and the company are connected entities, ie you own the company, you do not get any allowances on the purchases. Obviously I am so not know the full details on your situation but it would be my first guess.
Hope this helps.
Kind regards,
Chris
Hi, thanks for responding.
Well, QuickFile does not know we are connected. And if the connection is an issue then I should have simply gifted my intellectual property to the company. Otherwise I am paying personal tax on that £10k (which the company pays me out of profits), and the company can’t deduct the £10k from its profits. So tax is paid twice on the same profits.
Cheers,
Tom
Hi Tom,
From an accounting point of view I would recommend transferring the asset at either cost (ie any costs you incurred directly building the asset not including your wages) or gift the asset to the company.
At the moment I do not think that Quickfile can do capital allowances & AIA but @QFMathew please correct me if I am wrong. This is an area where your accountant should be able to assist you.
Kind regards,
Chris
Hi Both
We don’t support the recording of these details on QuickFile as they’re more of a tax return thing rather than accounting (although I’m no accountant).
For reference, there are posts on these topics here: