Expensive Car Lease Disallowance

Expensive Car Lease Disallowance

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Could someone please advise how the disallowance operates when a car is leased by a sole trader, and there is personal use -  is the private use element adjusted for before or after applying the 15% disallowance to the rental charges? 

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By calvinplummer
07th Sep 2011 17:29

Lease addback

Someone may tell me different, but if the lease costs were say £1000 and the private use of the vehicle 50%, I would calculate as follows

£1000 x 15% =£150 (addback)

Allowable lease costs £850 x 50% = £425 (addback)

This is on the assumption that the co2's were high enough for the 15% to apply and it was a lease entered into post 01/04/09

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By JeremyNewman
07th Sep 2011 18:53

It doesn't matter

Arithmetically, it's irrelevant. For example, assume the PU is 25% (i.e. 75% allowable):

 

100 x 85% x75% is the same as 100 x 75% x 85%

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