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Post Info TOPIC: AIA on cessation


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AIA on cessation

A hairdresser was self employed for several years, renting a chair in a salon.

When lockdown hit, she gave up her rental chair, and refurbished a spare room in her house as a salon, starting working from there in Sept 2020.

She stopped hairdressing altogether in Aug 2021.

Should I claim all the salon conversion costs on the 2020/21 tax return, even though trading stopped less than a year later?

Would the assets such as the chairs and dryers etc just revert to her personally? As they're only worth around £1,500 used, they would fall within the CGT allowance?

Is there anything else I need to consider?

Thank you


Master Book-keeper

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You can declare AIA on the 20-21 tax return, but they will have to be accounted for as a balancing payment at market value on cessation in September 2021.

It isn't a capital gain, as you will have claimed tax relief for it in the 20-21 accounts.

Would need more details on the refurb but would imagine these come under capital costs and therefore not tax deductable.



†Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.


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Anything else to consider. A few. Some not all, claiming for a bit of paint and a shelf in one room could result in CGT when sell the house. Worth it? Need to repay seiss?

-- Edited by SoloHans on Tuesday 18th of January 2022 10:34:04 PM

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