Commercial boat depreciation

[Major Catastrophe]

What is the annual book depreciation on a £120,000 commercial charter boat?

True, I have no idea what I am really asking or talking about, but someone posed the question to me, so I assume it must have a answer.

 

[Kawasaki]

There is no hard and fast figure or percentage that can put to this question.
No 'Gasses' guide etc to use as a perameter.

The 'write back' or 'write off' or depreciation as it were .
Would be sorted each year as per normal business practice.

There are no 'Trade Books' to refer to as such, if that's what you mean Major?

 

[mikefleetwood]

Surely, the answer to that is "the maximum the taxman will allow" - probably 25% if I recall.

Of course, the re-sale value will be something different. And adjustments to the tax calculations will have to be made should it be sold.

Not an accountant, just have done self-employed tax returns for years. Don't have a boat on my books though.

 

[epervier]

This is what I found at HMRC, but I would of thought a beancounter in the world of commercial marine might be a better way of finding what's what.

http://www.hmrc.gov.uk/ct/forms-rates/claims/capital-allowance.htm

 

[polyanna]

Good afternoon Major,
Seafisher is not a commercial boat (yet) but was bought through my company, as was Pollyanna. From what I can remember the "asset" was wrote down by 20% per year. Both boats have been used as accommodation when contracts have taken me away from home.
The rest of the time they were used for training (self and crew), as the company is transitioning to boat charter (eventually).

Of course they are never used purely for pleasure

I'll check the accounts when I get home.

Bob

 

[jfm]

What is the annual book depreciation on a £120,000 commercial charter boat?

True, I have no idea what I am really asking or talking about, but someone posed the question to me, so I assume it must have a answer.

There's no firm answer, but there are accounting rules. It's nothing to do with tax (you said BOOK depreciation, not tax)

Accounting rules say you amortise the expected cost of the asset over its expected economic life. Suppose you expect to keep the boat 5 years after which the business wont want it, and you estimate it will have residual £70k, and you use it equally each year for earning revenue. Then the book depreciation is £10k per year.

The other thing to remember is, no one will tell you off if you get it worng. No-one cares. Not HMRC for sure. You wont get arrested or anything if you use £10k and hindisght later proves it should have been £15k. It's possibly the least important decision you'll face all year

 

[Major Catastrophe]

Thank you very much jfm, and the others, but your answer seems pretty good and as much as the questioner expected, but found hard to believe.