My question is regarding HMRC capital allowances on a sole-trader's car with mixed business/personal use. The car has high CO2 emissions (ie, > 160g/km).
So far, I believe it can be treated as follows:
- added to a single-asset pool (because of mixe use)
- pool uses 10% write-down (due to high CO2 emisssions level)
- there is no other restriction of size of annual write-down (in particular, it can be >£3000)
- disposal of car creates a balancing event (because it's in a single asset pool)
Assuming above is correct, my quesiton:
- Is there any limit on the size of the balancing allowance that might arise on disposal? It seems that for an expensive car written-down at only 10%/year the balancing allowance could be quite significant? So far, I've found nothing in the HMRC manuals to limit this.
Thanks for any help.
Replies (5)
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No limit
Well, not exactly - the balancing allowance is restricted to the residue in the pool.
It's no different to the days of writing down an £80k car at £3k per year - usually resulting in significant balancing allowances on disposal.
Personal use
Don't forget the non-business use restriction - you said it was mixed business/private.
Cathy
PRIVATE USE ON BALANCING ALLOWANCE
hI cATHY
SO IS THE BALANCING ALLOWANCE OF 7400 ALSO RESTRICTED FOR P.USE? OR ONLY THE wda?