SCENARIO: Titanium Forge Ltd (TFL) is a heavy manufacturing company producing industrial valves. For the year ended 31 March 2024, TFL had augmented profits of £2.2 million. TFL owns 100% of the ordinary share capital of IronWorks Ltd, a UK resident company. During the year, TFL imported £500,000 of specialized machinery from Germany and purchased £1.2 million of new heavy plant machinery in the UK.
QUESTION: How should TFL account for the VAT on the £500,000 machinery imported from Germany?
ACCA · Question 17 · Corporation tax liabilities
SCENARIO: Titanium Forge Ltd (TFL) is a heavy manufacturing company producing industrial valves. For the year ended 31 March 2024, TFL had augmented profits of £2.2 million. TFL owns 100% of the ordinary share capital of IronWorks Ltd, a UK resident company. During the year, TFL imported £500,000 of specialized machinery from Germany and purchased £1.2 million of new heavy plant machinery in the UK.
QUESTION: What is the maximum capital allowance TFL can claim on the £1.2 million new heavy plant machinery purchased in the year ended 31 March 2024?
Answer options:
£1,000,000
£1,036,000
£1,200,000
£216,000
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