CA50410 - MEA: Allowances and charges: How allowances are given
Allowances and charges are made to or on any person under the
MEA code in taxing his trade of mineral extraction.
Allowances are given first for the chargeable period related
to the incurring of the expenditure - as defined in CAA01/S6 (1).
There is no provision for pooling- allowances are given on
individual items of expenditure. Balancing adjustments can
therefore arise in a continuing trade. However in practice no
objection should be raised if assets are grouped together for
computational convenience, provided that:
- individual sources are dealt with separately,
and
- expenditure written down at 10% per annum is distinguished from other expenditure.
In exceptional circumstances it may be necessary to reconstruct
separate computations for individual items where a disposal receipt
arises or a balancing allowance is due.
Allowances are given by reference to the balance of
qualifying expenditure not yet allowed less any disposal receipts
required to be brought into account. Normally writing down
allowance of 10% or 25% is due. For qualifying expenditure on
the acquisition of a mineral asset, the writing down allowance is
10% (CAA01/S418 (1)(a)). For other qualifying expenditure, the
writing down allowance is 25% (CAA01/S418 (1)(b)).
