Not going daft here am I?
I have a new client who buys in second hand cars, modifies them for racing then sells them on.
The previous accountant appears to have included the cars as fixed assets and (even worse) has treated them as company cars in the hands of the sole director. They're not even taxed or MOTed.
Surely they're a current asset?
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agree
stock. FA are intended for long term use within the bsuiness and the intention here is clearly to get shot ASAP. Do I take this to mean they have also been returned as P11d vehicles ? If so then HMRC need to be aware theres been a mix up and depending on the outcome possble claim against former accountant.
Thanks both
Nice to know I'm not losing it.
That is my fear pembo, although I haven't been able to lay my hands on the P11ds yet (or any other records for that matter). The client doesn't have them, the previous accountant is not responding to my handover requests. Client just remembers a large tax bill that was "something to do with the cars".
Careful on the P11D
Might be worth just checking with the client that all he did buy them, do them up and sell them on and did not race them himself.
If he did HMRC will expect a benefit to be reported regardless of how you treat them in the accounts.
I had A Client I would like to Forget
who was a 2nd hand car dealer and he would take fancy to the odd flash motor and keep if for a while to drive it himself. This led to Fixed Asset problems at the end of the financial year, so he told me. I was only ever involved in his bookkeeping and lasted just 9 months before I ran for cover.
reminds me
of a client I had years ago that insisted their convertible personalised plate BMW was a pool car...that was in the good old days pre MLR ..
Interesting hypothesis re racing himself...presumably normal car benefit rules go out of the window because of the definition of "car" under s115(1) as " a mechanically propelled road vehicle that is not etc"...thereon to normal use of other asset rules @ 20% ...?
Near where I live, there is a well known hillcliming event (ie motor racing) where you see all sorts of vehicles.
Some, of course, have never been near the public highway. Others, often older Porsches or similar, are beautifully turned out with all the racing fixings, such as bucket seats and roll bars, but are in fact also road going and are driven too and from the course.