Which rate of capital allowances ??

Which rate of capital allowances ??

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A sole trader commenced trading in 2012 and uses his car for business purposes which was first registered in 1994 (before CO2 emissions).

For the purpose of capital allowances his car has been introduced into a single asset pool (as there is also private usage) at market value at the date he commenced trading.

The question is does the main rate (18%) or special rate (8%) apply ???

As the vehicle was first registered pre 2009 before CO2 emissions then my understanding is that the old 'expensive car' rules apply and therefore the main rate allowance of 18% is given, however as my software is recognising the WDA start date in 2012 (when trading commenced) it is only calculating an allowance of 8% based on the new rules which I think is incorrect ??

Second opinion gratefully received.

Many thanks.

Replies (2)

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By Steve Kesby
13th Sep 2013 16:16

It's a main rate car

See S. 104AA(1)(a) CAA 2001.

The old "expensive car" rules don't apply as the asset has been introduced into the business and S. 13 deems the notional expenditure to be incurred then.

There ought to be some box you can tick to make it a main rate car; what would you do if it had low emissions or were an electric car?

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By pdorrington
13th Sep 2013 17:04

Main rate car

Thanks Steve.

I can override the capital allowances calculation it just gives me a warning saying that the allowance should not exceed the value which equates to special rate of 8%.

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