FYI, FYA

By THIS IS MONEY
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If I am claiming back the cost of equipment (such as a laptop, office furniture and so on) as part of my First Year Allowance. Does 'first year' apply to my first accounting year or my first tax period? If I bought equipment just after my basis period, but in my first accounting year, does this count as a purchase in my first year? If not, will I be barred from claiming the expenditure as FYA? JG, Farnborough

Maurice Fitzpatrick at accountant Numerica replies: First Year Allowances (currently at the rate of 50% for the year 2004/2005) can be claimed on any qualifying expenditure incurred in any given accounting period, regardless of whether they are accounts for the first year of trade.

Generally, the expenditure must be incurred by the end of the basis period in which the allowances are to be claimed, however, any qualifying expenditure falling outside the period can simply be claimed in the following period of assessment.

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