Limited company sell company car

[Standby]

Hello,
Limited company sell car with loss around £2000. In CT600 is field: Net profit on sale of fixed assets and next "Allowable as trading intangible fixed asset" and "Non-trading intangible fixed asset". Which one should be used? What is the difference?

Thank you!

 

[Bobbo]

A car is not an intangible fixed asset so I would suggest neither.

A car would be within the capital allowances regime. You say "loss around £2,000" but is that in cash terms or accounting terms? Whichever it is for tax purposes the loss is probably not 2,000.

 

[Standby]

A car is not an intangible fixed asset so I would suggest neither.

A car would be within the capital allowances regime. You say "loss around £2,000" but is that in cash terms or accounting terms? Whichever it is for tax purposes the loss is probably not 2,000.

'Whichever it is for tax purposes the loss is probably not 2,000". What do you mean?

 

[DWS]

'Whichever it is for tax purposes the loss is probably not 2,000". What do you mean?

How was the purchase of the car posted? as in treatment in the accounts and then claiming Capital Allowances?
The disposal of the car will follow the above both within the accounts and the CT600

 

[MyAccountantOnline]

Hello,
Limited company sell car with loss around £2000. In CT600 is field: Net profit on sale of fixed assets and next "Allowable as trading intangible fixed asset" and "Non-trading intangible fixed asset". Which one should be used? What is the difference?

Thank you!

Is the car a former business asset which was on the balance sheet or a car purchased to resell?

 

[Standby]

How was the purchase of the car posted? as in treatment in the accounts and then claiming Capital Allowances?
The disposal of the car will follow the above both within the accounts and the CT600

Company car was include as company assets with depreciation on it. In CT600 tax return was include as WDA.

 

[Standby]

Is the car a former business asset which was on the balance sheet or a car purchased to resell?

Company car was include in Balance sheet with depreciation on it and CT600 with WDA. No as car for resell.

 

[DWS]

Company car was include as company assets with depreciation on it. In CT600 tax return was include as WDA.

Well then just treat as a normal disposal for both the bookkeeping and the CT600 with what you received for the car as the disposal value

 

[Standby]

Well then just treat as a normal disposal for both the bookkeeping and the CT600 with what you received for the car as the disposal value

Ok, but is the sale of car in this case should be trated as disallowable expenses? And in CT600 how include this amount if this car was only one thing in WDA? How should I remove total value from WDA calculation?

 

[DWS]

Ok, but is the sale of car in this case should be trated as disallowable expenses? And in CT600 how include this amount if this car was only one thing in WDA? How should I remove total value from WDA calculation?

It’s not disallowable expenses!
It follows the same treatment that was used to introduce the car.
Bookkeeping-Disposal of an asset
CT600- Disposal of an asset
Both could have completely different figures

 

[Standby]

It’s not disallowable expenses!
It follows the same treatment that was used to introduce the car.
Bookkeeping-Disposal of an asset
CT600- Disposal of an asset
Both could have completely different figures

I mean if I complete capital allowance section in CT600, there is still Written down value c/fwd but it was only one assets in this company so I assume that any amount shouldn't be transfer to next accounting period...?

 

[Bobbo]

I mean if I complete capital allowance section in CT600, there is still Written down value c/fwd but it was only one assets in this company so I assume that any amount shouldn't be transfer to next accounting period...?

The proceeds received for the vehicle are deducted from the pool balance. Remaining pool balance can be carried forward and WDA obtained in future years. That the company doesn't actually have any fixed assets anymore is irrelevant.

 

[Standby]

It’s not disallowable expenses!
It follows the same treatment that was used to introduce the car.
Bookkeeping-Disposal of an asset
CT600- Disposal of an asset
Both could have completely different figures

When I enter this loss on disposal to VT Transaction (Expenses: P/L on disposal of plant and machinery) in VT Accounts is shown as disallowable expenses, which I should add back (is it treated as depreciation)...

 

[Standby]

The proceeds received for the vehicle are deducted from the pool balance. Remaining pool balance can be carried forward and WDA obtained in future years. That the company doesn't actually have any fixed assets anymore is irrelevant.

Ok, thank you. So If in future year won't be fixed assets, should I tick option "WDA not claim"? Or could use allowance ?

 

[DWS]

When I enter this loss on disposal to VT Transaction (Expenses: P/L on disposal of plant and machinery) in VT Accounts is shown as disallowable expenses, which I should add back (is it treated as depreciation)...

Ok, if that is how it is described then fine, I would have thought it would be ‘loss on disposal’ but it will have the same affect, this is purely for the bookkeeping and yes it will be added back for the tax computations.

 

[Standby]

Ok, if that is how it is described then fine, I would have thought it would be ‘loss on disposal’ but it will have the same affect, this is purely for the bookkeeping and yes it will be added back for the tax computations.

Ok, but earlier you wrote that isn't disallowable expenses and now its looks like there is that's blow my mind..

 

[DWS]

Ok, but earlier you wrote that isn't disallowable expenses and now its looks like there is that's blow my mind..

Because if that is what your software is describing it as after you have allowed for the disposal then I can not disagree, I was speaking more of the Capital Allowances side and the disposal, for bookkeeping only you know the figures that you put into the software and the depreciation that followed that.
I would have thought it would have went to a disposal account where the asset is then removed from the B/S as well as the accumulated depreciation.
Any loss from the disposal will not be an allowable expense for Corporation Tax as this will need to be shown on the Capital Allowances for the Company.
So 2 completely diffferent treatments and figures for the same disposal