So I’ve realized that in my last completed tax year 13/14 I had been allocating some purchases as “Office Equipment” which probably wouldn’t be considered Assets. (Low value stuff which is actually office equipment)
There are a couple of +£500 purchases which I believe are assets (correctly in the office equipment account) and I think I’ve managed to set up a journal to depreciate the value of those over subsequent years.
I foolishly thought that by paying for Quickfile’s end of year accounts service stuff like this would be sorted out but it’s unclear exactly what the end of year accounts service is actually for.
Anyway. What should I do? As I understand it all the items in that years “office equipment”(0030) nominal account will not be deducted from my net takings in that year and as such I will have paid Income tax on those items in that year.
Do I go back and move those non assets from that 0030 and correct My self assessment online with HMRC?
You can certainly journal these items out of 0030 to a P&L code. Those larger items can be depreciated later if you prefer. You just need to journal in the depreciation on the last day of your next accounting period using one of the approved methods.
Thanks Glenn,
How do you suggest structuring the depreciation? I’ve read the Journal entry in the knowledge base. There are a few items in the nominal account. As far as I can tell there is not a way to in QF Tag or link the Journal entries to the items I’m trying to depreciate.
I think from searching that you said it was difficult to implement a “depreciate this asset” button for invoices. This would be ideal for me but in it’s absence is there no other way to keep track of what’s going on? I was trying to use the project tagging system to keep everything together but that doesn’t work with Journals either.
Depreciation not allowed for tax purpose but it would be shown in accounts, tax wise you get allowances instead
There’s no automated way to journal in depreciation from a purchase invoice. But unless you need very accurate management accounts or you have huge amounts of depreciation to account for you can usually just do this once before the year-end.
You don’t need to log depreciation incrementally by week or month. Typically you would just figure out how much you want to depreciated an asset over the accounting period and then log a single depreciation journal on the last day of the accounting year.
I should say I’m not an accountant, but if you have any doubt I would recommend seeking further advice from a qualified accountant.