tilly819
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| posted on 9/6/20 at 12:23 PM |
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Any Accountants in the house?
Hi All,
Do we have any accountants in the house. I have a question that I don't seem to be able to find the answer for online.
I set up a business last tax year and am doing my accounts ready for January. The business is an engineering business and I am a sole trader.
When i started trading I did all the normal things like capitalising some personal assets into the plant and machine pool for WDA's
Got some pre-trading receipts etc and then all the normal income and expenditure etc for the year.
What I also have though is a large amount of stock (read as raw materials, sheet metal, bar stock etc) that I owned before trading that are now being
used for business.
I would like to know how to account for these?
Many of these materials I don't have receipts for so don't think I can put them down as pre-trading expenses.
My thought is... can I have a new pool into which I bring the raw stock at a reasonable market value approximation (like you would do with capital
allowances for say a machine) Then claim a writing down allowance on them? Then as the stock is used up they are removed from the pool? Then obviously
any profit made from sale off goods made from the materials goes though the normal income and expenditure.
Second thought. A significant proportion of these materials are/will be used in the development of a prototype product. The prototype product would
become a fixed capital asset as I understand it as it would be used for demonstrations etc Could I therefore capitalise the materials and use the 100%
RDA since the materials are being used for research and development of a new product?
Fyi we are not talking about a 4x8 sheet of plywood here these are 'exotic' materials.
Cheers,
Tilly
[Edited on 9/6/20 by tilly819]
F20C Haynes roadster 440 BHP/Tonne www.youtube.com/handmadeextreme
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MikeR
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| posted on 9/6/20 at 03:49 PM |
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up and until you use the word 'exotic' i was certain you bought the materials second hand and had a number of hand written reciepts for
the stuff that you've just remembered are in the back of that draw you never look in.
May be worth considering for the less exotic materials perhaps.
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