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Where Taxpayers and Advisers Meet

Capital Allowances

LEE1981
Posts:8
Joined:Wed Aug 06, 2008 4:05 pm
Capital Allowances

Postby LEE1981 » Fri Apr 23, 2021 1:32 pm

Hi

I am after a bit of advice on a company who wants to purchase an all-electric car.

If, for example of company purchased a car of a value of £60,000 my understanding is that they could claim a FYA for the full value in the year and give rise to a tax reduction at 19%, (£11,400).

If the vehicle was sold in the following year I am presuming, for example if sold for £45,000 that there would be a balancing charge of this value and a tax liability of £8,550.

Overall the tax benefit would have amounted to £2,850.

In addition to this there would be a loss on disposal within the P&L, (disallowable for tax).

Does my assumption stack up?

In addition to this is the car was £60k plus vat as it is not for purely business use the VAT could not be recovered, could the VAT element be added to the total claimable on the capital allowance?

Thanks

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