Tax book depreciation and capital work in progress
Keep income-tax depreciation for your plant, vehicles and buildings by block, beside the depreciation in your books. You may build or install something for your own use, such as a batching plant or your own office. Its costs gather as capital work in progress and become a fixed asset in one entry.
PLANSScale only
The problem it solves
- Your books depreciate an excavator over its life, while income tax wants 15 % a year on the block. The two are kept in separate sheets.
- Machines bought in March get a full year's tax depreciation in the sheet, when they should get half.
- The cost of erecting your own batching plant sits in expenses or a suspense account for months.
- When it is finally capitalised, nobody can show which bills made up its cost.
How it works
- Open Invoicing > Configuration > Asset Categories > Tax Blocks and press Load Country Pack. It makes starting blocks and categories for your entity's country (India, the UK, Australia or the UAE).
- Check each block's rate with your accountant and give each category its block. Type an opening tax value per block if you move from another system.
- Assets take their category's block by themselves. Where tax cost differs from book cost, type the Tax Cost on the asset.
- At the year end, open Invoicing > Fixed Assets > Tax Depreciation, pick any day of the year and press Work It Out.
- For your own build, open Invoicing > Fixed Assets > Work in Progress > New. Give the name, the category it becomes, the work-in-progress account, an analytic account and the budget. Press Start.
- Post the bills and entries for it to the work-in-progress account with that analytic account. Cost So Far adds them up.
- When it is ready, press Capitalise. One entry moves the cost to the asset account and a draft asset is made; confirm it to start depreciation.
Everything it does
Tax blocks
- Methods: block on written-down value, pool on reducing balance, per asset diminishing value, prime cost or straight rate, no tax depreciation
- Rate, half rate below a number of days (180 for India), first-year allowance, small pool write-off, effective life, write off below
- Opening tax value and its date, per block or per asset
- The tax book posts nothing to your accounts
India pack
- Blocks: computers and software 40 %, plant and machinery 15 %, motor cars 15 %, vehicles for hire 30 %. Furniture and fittings 10 %, buildings 10 %, residential buildings 5 %, intangibles 25 %
- Categories with book lives, such as plant and machinery 180 months and buildings 720 months, straight line
- Small items under 5,000 written off at once in the books (not land or buildings)
- Every rate is a starting value for your accountant to check; add a block for any rate your machines need
The tax report
- Per block: opening, added at the full rate, added at half rate, sale money, depreciation, closing and gain
- Per asset for per-asset methods: opening, addition, depreciation, closing, balancing on sale
- Worked out year by year from the first asset or the opening value, on your financial year
- Shown on screen; no tax form is filled
Capital work in progress
- Numbered CWIP/year/; Draft, In Progress, Capitalised, Cancelled
- Cost So Far from posted lines on the work-in-progress account with the analytic account; the list behind it opens from the button
- Over budget is flagged
- Capitalise on today's date: a draft asset with the full cost and the analytic account
- Cancel only while nothing is booked to it
Who uses it
Accountant (Asset Manager)Sets up blocks, runs the tax report, opens and capitalises work in progress.
Tax consultantChecks the pack's rates and reads the yearly figures per block.
Where you use it
- Web: Invoicing > Configuration > Asset Categories > Tax Blocks
- Web: Invoicing > Fixed Assets > Tax Depreciation and Work in Progress
- Not linked to your construction projects: client projects are not capital work; their cost stays in the building budget
- Not fed by Construction's material issues or wage runs: only entries on the work-in-progress account with its analytic account count
What you control
Settings
- Per block: method, rate, half rate below 180 days (India), first-year allowance, opening value
- Per category: its tax block
- Per asset: Tax Block, Tax Cost, opening tax value
- Per work in progress: category, account, analytic account, budget
Questions
Does it file our income-tax return or the tax audit form?
No. It gives the depreciation per block for the year on screen. Your tax consultant uses the figures.Is a client's building capital work in progress?
No. Work in progress here is for assets you build for yourself, such as a batching plant, a site office you keep or your own building. Client work is costed in the building budget.What date does the asset start from?
Capitalise uses today's date as the day it is put to use. Capitalise on the day the asset is ready.Which plan has it?
Scale.Related features
PLANT, SCHEDULE, QUALITY, SAFETYPlant register, log sheets and servicingEvery machine on your sites, own or hired, with a daily log sheet of readings, hours, idle time, breakdowns and fuel. Confirmed log sheets charge the project, and servicing falls due by date or meter reading. Own plant can become a fixed asset, be rented out, sold or scrapped.ASSETSAsset care, and assets issued and returnedGive a total station, a drill, a generator or a laptop to a site engineer or a site. A site engineer confirms in the app before the asset moves to them. Record how it came back and any damage charge. Keep each asset's warranty, maintenance contract and insurance, and the person looking after it is told 30 days before each one ends.ASSETSPhysical verification of assetsCount the plant, tools, instruments and site office equipment at a site or your yard by scanning their QR tags. You see what was found, what is missing, what turned up at another site and what is not in the register. You also see who saw each asset and when.ACCOUNTINGFull accounting with GST returnsKeep the books in the same system as your sites. Approved client progress bills, subcontractor bills, wage runs and hire bills reach accounts as drafts, with retention, advances and TDS on their own accounts. Scale adds the full accounting screens and reports, from ledgers to cash flow, and GSTR-1 and GSTR-3B for Indian entities.MONEYBuilding budget with 80 and 100 % alertsOne budget per project, by cost code and place, approved once and changed only by approved revisions. Costs from site flow into it every hour. The project manager is told when a line passes 80 % and 100 % used.
See your next site report on it.
Tell us what you build, how many sites you run and how your client hears about progress today. We will set up a project with you and send your first daily update.