Assets that have been entered in the General small business pool must have their business use assessed each year. Where there is a change to business use and the change is greater than 10 percentage points, an adjustment to the opening balance of the pool must be made.
The Small business SBE Private Use tab will only ever be active where assets have been added to the General small business pool.
For the General small business pool, the adjustment to private use does not need to be made once the asset has been pooled for 4 years.
Former STS taxpayers no longer using the Simplified depreciation rules may not adjust the private use and may not add anything to the General small Business Pool. They may only dispose of depreciating assets.
Reduction factor and Adjustment to opening pool balance
The reduction factor and adjustment to the opening pool balance will be calculated automatically based on the data entered. The fields involved in the calculation include:
|Tax year added to pool||This will be derived from the Asset Details previously entered and is used to determine whether an adjustment needs to be made or not.|
|Asset purchased while Small business entity||The reduction factor is based on whether the asset was first held while the taxpayer was a Small business entity or before. This information allows the correct adjustment factor to be used.|
|Last private use (%)||Enter the percentage of private use for this asset at the time the percentage last changed.|
|Present year private use (%)||Enter the percentage of private use for this asset since the time the percentage last changed.|
|Asset value||Enter the asset value. Broadly this is the cost or written-down value of the asset at the time it was pooled.|
The formula to calculate the change is as follows:
|Asset Value||X||Reduction Factor||X||(Present Year Estimate – Last Estimate|