Brain freeze - loss on disposal of company car

Brain freeze - loss on disposal of company car

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Hi,

Having a brain freeze - as I am trying to put together scenarios with regard to company car purchase for the MD.

If I purchase a company car, I know it will go into a special rate pool at 8% reducing balance.

After two years, assuming the car is sold for less than the TWDV, is the loss that arises allowable for corporation tax?

Sorry if this is too basic - 

Thanks.

Replies (7)

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By JCresswellTax
23rd Apr 2014 17:14

Yes

As this is effectively a balancing allowance.

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By alan.rolfe
23rd Apr 2014 17:22

No balancing allowance until trade ceases

See https://www.accountingweb.co.uk/topic/cars-and-capital-allowances-solution

 

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By Cloudcounter
23rd Apr 2014 17:27

Am I missing

something?

My understanding is that you deduct the sale proceeds from the balance at the start of the year  and that the balance in the pool continues to be written off at 8% until you hit the small pool level.  There is no balancing allowance until the company ceases trading. 

It would be different for a sole trader or partner but only if the vehicle is in a single asset pool because of private use.

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Replying to SteveHa:
Routemaster image
By tom123
23rd Apr 2014 20:57

Thanks

Cloudcounter wrote:

something?

My understanding is that you deduct the sale proceeds from the balance at the start of the year  and that the balance in the pool continues to be written off at 8% until you hit the small pool level.  There is no balancing allowance until the company ceases trading. 

It would be different for a sole trader or partner but only if the vehicle is in a single asset pool because of private use.

Thanks - that is what I was looking for - I had a feeling / recollection that the WDA goes on 'forever', even though the asset is sold. Appreciate your help.

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By JCresswellTax
23rd Apr 2014 17:29

Oops

Sorry, i'm clearly getting mixed up, am I thinking about short life assets, or perhaps the rules when cars had their own pool if they cost more than £12k?

Am i that out of date :-0

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Replying to GHarr497688:
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By Cloudcounter
23rd Apr 2014 21:12

Me too

JCresswellTax wrote:

Sorry, i'm clearly getting mixed up, am I thinking about short life assets, or perhaps the rules when cars had their own pool if they cost more than £12k?

Am i that out of date :-0

You had me wondering the same about myself! Your posts are normally spot on, and I had to make sure I was right before I posted. :-)

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By Martin B
24th Apr 2014 16:41

capital allowances. loss on disposal of company car

flagging

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