What is the capital allowance rate in Nigeria?

What is the capital allowance rate in Nigeria?

Capital allowances claimable in any year are restricted to two-thirds of assessable profits for all companies, except companies in the manufacturing and agricultural sectors, which are excluded from this restriction. 95% initial allowance for plant used in agricultural production; others 50%.

Can you claim capital allowances on motor vehicles?

A company may claim capital allowances on capital expenditure it incurs on certain types of business assets and business premises. A company can claim capital allowances on: plant and machinery. motor vehicles.

What expenses are Disallowable?

Disallowable Expenses include your own wages and drawings, pension payments, NICs, or any payments made for non-business work. Tip: Keep a record of any money you take for your own personal use from your business cash, business bank account, or personal bank account if you don’t have a separate business account.

What is minimum tax in Nigeria?

0.5%
Minimum tax payable is calculated as 0.5% of gross turnover less franked investment income. For non-life insurance companies, minimum tax is calculated as 0.5% of gross premium. For life insurance companies, minimum tax is calculated as 0.5% of gross income.

Can I claim capital allowances on hire purchase?

Capital allowances are not generally affected by the way in which the business pays for the purchase. So where an asset is acquired on hire purchase (HP), allowances are generally given as though there were an outright cash purchase and subsequent instalments of capital are ignored.

What is the difference between initial allowance and capital allowance?

Capital allowance is only applicable to business activity and not for individual. Capital allowances consist of an initial allowance and annual allowance. Initial allowance is fixed at the rate of 20% based on the original cost of the asset at the time when the capital expenditure is incurred.

Is depreciation a capital allowance?

Depreciation: Is an accounting term for spreading the value of a fixed asset (vehicle or equipment etc.) over its useful life. Capital allowances: HMRC ignore the depreciation figures from the business and give tax relief on their version, called Capital Allowances.

Why are expenses Disallowable?

Disallowable business expenses are expenses that cannot be deducted against business income. They may be disallowed under the Income Tax Act or because, generally, they are not incurred wholly and exclusively to generate business income.