Advise needed on Depreciation and MS Money

[KatieMac]

It must be my night for asking for advise....
How do I do depreciation in my accounts (for a car) and more specifically how do I input it in MS Money (Ijust don't understand the help)
Thanks in advance

Katie - can't help on MS money.

When you say depreciate in your accounts - do you mean the transactions required for a Profit & Loss Account and Balance Sheet or are you talking about double entry accounts?

Might be able to help

Dur...I don't know
"Someone" said that I can claim 25% dep on my new car - I assumed that this would be an expense and go with all the other expenses - but Money is telling me (through HELP) to put it in the nominal ledger

However in the end I will only need to put it somewhere on my tax return (I presume)

Do you get the feeling I don't know what I'm talking about....there could be a reason for that

Don't be so hard on yourself - depreciation is an allowable expense and can be charged as such - provided of course it is a business asset?

Sorry but can't help with MS Money I am afraid.

Yep it is for the childminding...I guess I'll have to look tomorrow for the MS Money help

Thanks for helping

Can anyone help me with MS Money??

I think you may be confusing 2 things.
If you are doing accounts as accounts then you can depreciate how you like or not at all subject to accounting standards about useful life etc.
But if you are looking at working out your tax allowances forget anything you are putting in your accounts as depreciation in accounting sense is not allowable for tax. Instead you take 25% of the cost of the car or market value when you first used it for business; what is left over you take 25% of the following year ( this is called a reducing balance basis) and so on until you sell the car. Then you offset what you sell it for against the amount left oever when you took off all your 25% s and that is either a tax allowance or charge.
More importantly if you use your car privately or personally you must adjust the amount you claim on your tax return ie if you use it 80% for business only claim 80% of the 25%. The tax return notes do go into this.

I am not familiar with too many of the rules for keeping books for business tax purposes, but with regard to MS Money I can help you enter the details of your car & how to record its depreciation over time. I am using Money 2003 but I think the method is similar for all earlier versions

Firstly you need to enter the car as an 'Asset' account. When doing this you can enter the opening value of the car. You can then enter individual transactions and update the value of the car as frequently as you want but I tend to enter one transaction per year towards the end of March. You can assign a category to the depreciation, either a new one specifically called 'depreciation' or just classify it as a job expense or a motor expense

Thanks Clayhead I'll try that - you make more sense than the help button

Rosalind - you're right I'm very confused - I thought the dep on the car (the 25%) could be added into my expenses and therefore decrease my tax liability - I haven't had my tax return yet(obviously) so I'll have to read the notes when I get it....I'm hoping to use it all for business (childminding) as we can use DH's car for our journeys - how long that will last (as the new car is a dream to drive) i don't know.....
But as I run my accounts on MS Money - I was hoping to input it right (iyswim)