Will this work this century (it did in the 1970s)?
Buy a 'clean' car, have it delivered to your business in the last couple of days of your accounting period. Use of car is 100% business for the remaining days of accounting period. Thus claim the 100% FYA.
After accounting period is ended, use of car is both business and private.
Is it right that there will be no 'clawback' of the FYA until the car is disposed of?
Raibeart MacDougall
Replies (3)
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"Clean" cars
Ben
There are 100% FYAs for cars with low carbon dioxide emissions (currently < 120g/km).
s45D CAA 2001 wef 16 April 2002.
FYA
Good question!
The apportionment of the FYA between business and private use must be in accordance with the legislation:
"CAA 2001, s 205
(1) If it appears that a person carrying on a qualifying activity has incurred expenditure on the provision of plant or machinery—
(a) partly for the purposes of the qualifying activity, and
(b) partly for other purposes,
any first-year allowance to which he is entitled in respect of the expenditure must be reduced to an amount which is just and reasonable having regard to the relevant circumstances.
(2) The relevant circumstances include, in particular, the extent to which it appears that the plant or machinery is likely to be used for purposes other than those of the qualifying activity in question......"
In the light of sub paragraph (2) you need to take account of the future likely usage not just the usage in the accounting period.
Eh?
Am I missing something? When did the IR allow 100% Cap Allowances on cars? Always thought it was 25% limited to a max of £3,000. Has this changed? Where is the IR guidance?