At the start of my business (last year) i bought a cheap car to start up with, cost £200.
I added it into quickfile as a asset, can anyone tell me how I remove it as a asset, I have found the sale of asset in the invoice section but how do I remove it from my system as I made nothing by scrapping it…hope that makes sense to you all
I’m not an accountant, but my understanding is that when you dispose of an asset you need to create a journal to reverse the original purchase price and the accumulated depreciation (if any) on your balance sheet, and post the balancing entry as a debit to “sale of assets”. Any money you received for the asset would then be a normal sales invoice also posted to “sale of assets”, and on your profit and loss report that code will then show green (credit) if you sold the asset for more than its net book value, or red (debit) if you sold it for less than its net book value (or if you didn’t receive anything for it at all).
For example, if you originally bought the asset for £200 (which would have been a debit on motor vehicles 0050) and have depreciated £40 of that so far (credit motor vehicle depreciation 0051), and received £50 for the scrap value then you’d enter a journal
- credit 0050 £200
- debit 0051 £40
- debit 4200 £160
and a sales invoice for £50 posted to the same 4200 sale of assets code, and you’d be left with £110 debit on 4200 in your P&L reflecting the loss on disposal.
That should cover recording it in QuickFile, but if you claimed capital allowances on it in your last year’s tax return then you will need to talk to a real accountant about what (if any) balancing payments you need to make this year.