Capital Allowances

[joebarter]

Hello can anyone tell me about capital allowances and the rules if you have to dispose of a vehicle due to mot failure and not cost effective to have repaired. Claimed 50% in first year then 20% in second year ,can you still claim even if the vehicle had to be scrapped on your allowances until balance is nil.

[CNEO]

Joe,

The capital allowances regime for vehicles/cars has undergone a fair bit of tinkering of late, so I think you'll need to contact your accountant for this one.

Sorry!

[MyAccountantOnline]

Hello can anyone tell me about capital allowances and the rules if you have to dispose of a vehicle due to mot failure and not cost effective to have repaired. Claimed 50% in first year then 20% in second year ,can you still claim even if the vehicle had to be scrapped on your allowances until balance is nil.

If you scrap the car and get nothing for it you treat it as having been sold at a nil value which will give rise to a balancing allowance.

[CNEO]

I would have thought this would not be the case if the vehicle was in a P&M pool. Just continue to claim WDA's until the pool is less than 1k at which point you are allowed to write off the balance.

[Homshaw]

It is common to declare a small amount of private use which would provide justification not to put it in a general pool

However I believe there are plans afoot to stop this

[MyAccountantOnline]

I would have thought this would not be the case if the vehicle was in a P&M pool. Just continue to claim WDA's until the pool is less than 1k at which point you are allowed to write off the balance.

In reality most cars have some element of private use and as such should be put into a single asset pool, and cars costing more than £12,000 when acquired must be dealt with in a seperate single asset pool.

[RAL]

Hello can anyone tell me about capital allowances and the rules if you have to dispose of a vehicle due to mot failure and not cost effective to have repaired. Claimed 50% in first year then 20% in second year ,can you still claim even if the vehicle had to be scrapped on your allowances until balance is nil.


The op said claimed 50% CA in first year, so it could be van or commercial vehicle.

[David Griffiths]

If it's been done properly, it cannot be a car (because of 50% claim) and there's no private use adjustment (again because of full 50% claim).

Got to wonder what was the 20% claimed in year 2. 20% of the original price (wrong) or 20% of the residual balance?