Annual Fillings - Asset


I have an acocunting degree but long time ago, in another juridiction… I want to challenge myself and do the annual filling myself.

I have set up a business, relatively small: 200 invoices for £9k turnover, realtively simple buy and sell VATable goods, buying a bit of equipment. Will show a loss the first year.

I have dealt with my stock as at closing date, as I have paid for my stock which is therefore sitting on the balance sheet, no problem with that I am competent enough - I think - to make stock count and journal entries.

As per my fixed assets, I have bought a few different machines or computers, for a total of £2k (cost of purchase). My assets have all a 3y life span.

How does UK accounting work?

  • Do I just hit my P&L by the £2k of my assets?
  • Do I amortize over 3y each of my asset and hit the P&L with the apropriate pro-rata amortization?

And of course, a reference to how to deal with the apropriate journal entires in Quick File?


How you account for the assets and how you claim tax relief on them are two different things. In your accounts you would amortize over the life of the asset but for tax return purposes you add back in the depreciation and then claim either “capital allowances” or “annual investment allowance” instead. Exactly what the best choice is in a given situation depends on many factors and as I’m not an accountant myself I can’t advise beyond suggesting you read up in detail and/or talk to a UK-trained accountant at least as a one-off for your first year.


As an accountant who can’t take work at the moment, I would suggest having an (Ian is correct that they should be UK trained) accountant review the annual accounts before they are submitted. You may have to pay for an hour of their time but this is much better than HMRC finding errors further down the line.

Ian is mostly correctly although there are some tweaks. Capital allowances are the overarching term for the tax treatment of all your capital purchases. For the majority of people these will normally contain:

Annual investment allowances
First year allowances
Super deduction
Writing down allowances

You will claim different allowances depending on what asset you have purchased. My general advice is to make sure you claim the correct type of allowances and claim the worst type if you are not sure.

Hope this helps :slight_smile:

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