Annual Capital Allowance

I use Quick File to maintain parallel accounts.

My accountant deducted an amount of £1000/- from profit as Annual capital allowance in my last returns. I just copied him and removed equivalent amount on Reports - Tax Summary page.

Deductions - Office Equipment [0030] £999.99 DR

However, I do not wish to copy my accountant blindly. I want to maintain my accounts independently in QuickFile.

  1. Could you advise how does this impact my accounts in the current financial year? Any specific accounting entries I need to book.
  2. What are the deductions or addbacks on Tax Summary Page so that my tax returns are inline with my accountant for the current year?

Many thanks in advance.

Hello @wrongfindata

Queries such as this are beyond the scope of our support and we would recommend seeking professional help from an accountant as we are not registered accountants nor bookkeepers.

You are best asking your Accountant to supply you with a copy of his tax computation for the year in question. This will list net profit per the Accounts plus …addbacks to the profits (such as private proportions of expenses) and deductions from profits (such as Capital Allowances for plant/equipment etc). These allowances are very complicated and the rules change almost every year so best to follow his/her lead.


Capital allowances are not accounting entries, they are adjustments to taxable profit and happen outside the accounts. You can’t, therefore, adjust your Quickfile accounts to reflect entries such as this. If you want QuickFile to correspond with your final statutory accounts for the year, you need to ask your accountant for a journal containing his/her year-end adjustments, which you could then enter in QuickFile so that it agrees with his/her accounts. The adjutments to the tax return, to arrive at taxable profit and therefore tax payable are a completely separate exercise, outside of the accounting entries themselves. All you reflect in the accounts is then the liability for tax payable.


Thanks all.

if I ask the accountant what the entries are, the very purpose of maintaining the parallel accounts is lost.

Not sure why you want to run parallel accounts anyway? Why not just let the accountant do what you’re paying him for?

Because a few years ago, my accountant was taken over by another company and they made a right mess of it. I had to check each and every entry against my bank statement.

To show the effect of capital allowances on quickfile (along with QF’s estimated corporation tax) I use this journal (its for a set of Ltd company accounts ending this month)

Capital allowances are not an accounting entry, they are an adjustment to taxable profit. They therefore shouldn’t be entered into the accounts at all.

Those 2 Quickfile nominal codes are to show the corporation tax liability on the balance sheet (if desired) ready for the joint Companies House and HMRC’s accounts.
They have no effect on the Profit and Loss except to add “Below the line” profit after tax entries at the bottom of the profit and loss and excluded from Gross Profit.
For example:

The only journal you should be entering into the accounts is to Debit 8500 and credit 2320 with the corporation tax charge for the year, as calculated on your tax return or by your accountant. If you want to split it into constituent parts and relate it to the estimated tax charge etc., then I suppose you can do that and have 2 lines for each part. As long as, at the end of the day, the tax charge and the tax liability show correctly.
I don’t really see the point though, as capital allowances aren’t accounting entries, they are part of the tax calculation which happens outside of the accounts. They should be shown in your tax computation, not your accounts.

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