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Where Taxpayers and Advisers Meet

capital allowances on a car

wendersaw
Posts:1
Joined:Thu Jan 26, 2017 4:48 pm
capital allowances on a car

Postby wendersaw » Thu Jan 26, 2017 5:20 pm

Hi
I'm a private hire taxi driver and disposed of a car and bought a new one in 2012. I had claimed writing down allowance on the first car and then when i disposed of it there was a negative balancing charge and i added this to the cost of the new vehicle to carry forward in the pool. I was subsequently diagnosed and treated for breast cancer and after a year without working, i returned to work in a limited capacity and I have not owed any tax since and not needed to use any writing down allowance. I think i am going to have to replace the car soon, which means if i don't include any writing down allowance in 15-16 return it will have been bought and disposed of without having ever been written down, just carried forward in the pool. Is it Ok to do this? Since the vehicle will obviously be sold for less than i paid for it there will again be a negative balancing charge, do add in the cost of a new vehicle and carry that forward? Or can i no longer include that vehicle because i haven't claimed any capital allowances for it, despite it having been used in the business? I spoke to HMRC but couldn't seem to get a clear answer - basically it seems the person i spoke to was saying that if I've never claimed CA against the vehicle, that i can choose not to include it at all, or if I do include it i would have to put the value of the vehicle as it was in the year i was going to write it down (but then what do i do with the amount that was left in the pool from the previous vehicle ?)?

I don't know if i've managed to make sense here, but thanks if you are able to advise in any way!

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