Farm tools- Depreciation

893bet

Hi,


Can I writefarm tools off against tax in a single year or to they need to be depreciated over 8 years?


I am talking relatively small money


e.g set of wrenches 100 euro, drill 150 euro and a chain saw 200 euro.



Preference is a single year.

Calahonda52

You needs to distinguish between depreciation which is in your financial accounts and capital allowances which are the equivalent in your tax computation.

My sense is the 8 years

893bet

Any one else able to say for definite?

The pointless of depreciating of such small sums over 8 years makes little sense.

Calahonda52

893bet wrote: »

Any one else able to say for definite?

The pointless of depreciating of such small sums over 8 years makes little sense.

.
Pointless!
This is not a TV game.
The issue is very clearly related to two things.
The first is materiality and the second is the matching concept of allocating the cost against the associated income stream.

893bet

Calahonda52 wrote: »

.
Pointless!
This is not a TV game.
The issue is very clearly related to two things.
The first is materiality and the second is the matching concept of allocating the cost against the associated income stream.

I see you are as condescending here same as over on construction forum. Tipp back over there.

I am asking for opinion of someone who can answer definitively. What you have offered is “my sense”.

Net result of each method of accounting for the cost is the same but if you can’t see the pointless nature of accounting for 25 euro write off against tax for 8 euros on a small farm account then well....

My question to rephrase is perhaps is there a cut off point where cost is spread over 8 years vs being accounted in a single year e.g I buy a set of screw drivers for a tenner..... do I need to spread that across 8 years against tax...

thegolfer

By the letter of the tax legislation Section 284(2)(ad) TCA 97 provides for the write of over a period of 8 years at a rate of 12.5%, fact, not opinion or sense.

However, if the items are small enough in value you could write these off on day one, ie through the P&L and don't capitalise, the premise being that they are considered an expense rather than an item of capital expenditure.

If the items continue to provide enduring use past one yea then looks at capitalising these for CA purposes.

My feeling, write them off, documenting why you feel they do not represent capital expenditure, providing past examples, and hold on file when Revenue query, possibly capitalise the chainsaw as this can last longer than other items.