Is your commercial tax software sufficiently up to date to deal with the new Capital Allowances regime?

The new style capital allowances computations for plant and machinery and also industrial or agricultural buildings applies for the first time to 30 April 2008 year ends (corporate and non-corporate businesses), which many firms are now starting to work on.

Some tax software systems have not been updated at all, while others have been partially updated for some but not all of the changes.

All firms need to be aware of their own position, and make transitional plans if necessary, to avoid incorrect computations being used to advise clients.

Checklist

This checklist should help you to ascertain whether your software is up to date for 30 April 2008 year-ends and onwards.

Is your software dealing with the following?

	Yes/No/ N/A
1.  Has a hybrid rate been calculated for the general pool (as opposed to the normal 25%)?
2.  Has a restricted annual investment allowance maximum been calculated (as opposed to giving first year allowances to post 5 April expenditure)?
3.  Are agricultural or industrial buildings allowances being phased out?
4.  Has a hybrid rate been calculated for the long life pool (if applicable)?
5.  Can an appropriate CT600 be produced if dealing with a corporate client? It is understood that HMRC will not be able to provide an updated form until October this year.

If the answer to any of these questions was no, then the firm should contact its software provider and ask for an estimated date when the software will be ready and consider how computations should be dealt with in the meantime.

The plan

Firms essentially have two options open to them in these circumstances:

1. Put all computations on hold until the software is updated; or

2. Prepare the computations (at least partly) manually.

The latter has been popular with some firms as it provides hands on training on the new capital allowances regime.

Either way, the firm needs to ensure that it:

• Informs all partners and staff of the planned approach as soon as possible; and
• Implements a procedure to update all client records once the software is updated.

Training

Remember that SWATUK has produced a practical training course on the new capital allowances regime to help you and your staff get up to date on the changes quickly and easily.

The course is available online for just £17.50+VAT or on CD for just £99+VAT. Click here to find out more about the course and to order your copy online.

Alternatively, you can call 0800 2800 433.

Sharon Cooke 
August 2008