Capital Allowances

Capital Allowances

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A driving instructor has purchased a new car for his business, properly fitted with dual controls and kitted out with the driving school roof box and logo etc. There is no private use of the vehicle.

Q : Does this qualify for annual investment allowance on the basis that it is plant and machinery for the purposes of the trade?

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By Ernest N Dever
14th Apr 2011 11:29

Yes

Case law (Bourne v Auto School of Motoring) has established that a vehicle fitted with dual controls is "of a type not commonly used as a private vehicle and unsuitable to be so used" and so isn't a car.  Since it isn't a car, it's P&M qualifying for AIA.

If it's genuinely used wholly for business purposes, you can also recover the VAT if your driving instructor's VAT registered.

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