Capital allowance in Xero

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From https://www.gov.uk/capital-allowances

You can claim capital allowances when you buy assets that you keep to use in your business, for example:

• equipment
• machinery
• business vehicles, for example cars, vans or lorries

These are known as plant and machinery.

You can deduct some or all of the value of the item from your profits before you pay tax.

The specifics of what and how much we can claim on should be down to professional accountants; to make life easier for them, and to keep our books reconciled, we've set up an account code 789 - Capital Allowances

This doesn't do anything to the transactions, it's just a convenient way of keeping track of them for the accountants to deal with at a later date (this has been approved by our bookkeeper!)

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General process for handbook - adding a new account code

• Top menu - Accounting > Advanced > Chart of Accounts
  • That's a shortcut which might not be set up on all accounts. If it's not there, go to the Organisation dropdown on the left of the top menu, hit "settings", then scroll to the bottom of the page for "advanced settings" and then go to Chart of Accounts
• Then just hit "add account" at the top of the table, and fill out the form
  • (You probably shouldn't do this unless you're following instructions in a guide, and/or you understand what all the different account categories mean (assets, expenses, revenue, liabilities etc.)