PBR 2008: Company cars – the final piece of the jigsaw. By Rebecca Benneyworth

Dear Marian, Please don't fe offended but may I suggest that you book yourself on a course to get a good update on the new rules. while I appreciate the changes are confusing it does scare me to know that you may be doing tax return for clients and you don't even up a good understanding of the rules.

2008-09: The old rules re expensive cars with a value of £12,000 or more still apply with CA restricted to £3000 per annum restricted further by percentage of private use
2009-10 new rules apply from 1 April for companies and 6 April for individuals and partnerships. The Capital allowances are calculated to the CO2 emissions not the price of the cars.
New car leases rules apply from same dates as new CAR Capital Allowances rules. for 2008-09 the old rules still apply.

AIA can be claimed for all expenditure up to £50,000 (subject to transitional rules) except cars and Motor bikes in 2008-09.
No FYA in 2008-09 that is correct but watch out if asset acquired before 1 April/6 April 2008 for transitional rules.
This is only a brief summary it would take too long to explain it all now.
Can I refer you to some excellent articles on Accounting Web re new capital allowances rules (AIA/FYA and cars)
http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=189237&d=1032&h=1019&f=1026
http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=185334
http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=191757&d=1025&h=1058&f=1026&dateformat=%25o%20%25B%20%25Y

I hope these will help
good luck
M

Can someone clarify a couple of things for me. I am trying to separate the rules for 2008/09 from the rules going forward for 2009/10.

Cars - emmissions below 110g/km qualify for 100% ca, irrespective of personal use, THis is in effect from 2008/09 onwards so it applies to teh tax returns we are currently doing. I have come across the mention of 120g/km in some literature, but was this subsequently reduced to 110g/km for 2008/09 onwards?

Cars 110g/km - 160g/km get 20% ca. restricted to 3000 if personal use. This relates to both 2008/09 and 2009/10. So this relates to the tax returns we are currently doing.

Cars over 160g/km - only get 10%, but for leased cars there is some tweak on this - the number 15% jumps to mind. But for our 2008/09 tax returns this 15% thing has no impact, so for cars over 160g/km get 10% restricted to 3000 if personal use. I will need to find out about the 15% thing after coming to terms with 2008/09 rules (also, does this have any impact on the "should I buy or lease" question.)

The AIA and new 10% pool and reduction on WDA to 20% etc is all in place now, for our 2008/09 returns with hybrid rates etc, with FYA disappearing for 2008/09. But has the FYA of 40% come back again for 2009/10, for expenditure above 50k, and do integral features qualify for the 40% FYA or is it just general pool stuff?

Can someone clear up these issues for me please please please!!!
many thanks

I hope I'm not the only one with the problem of detangling the 2008/09 rules from the 2009/10 rules. I want to fill in tax returns without that nervous feeling of "i hope this is right!!!"

I'm Jaguar girl myself. Good old British make.

However, the new rules affect capital allowances from date of purchase,so your lady's Lambo (at emissions of more than 160g/km) will be at 10% if purchased after 6 April 2009 with of course a balancing allowance when and if sold (if she can part with it!!) assuming that she has private use. If bought through a company the simple difference is no balancing allowance as in a class pool and not a single asset pool.

Brrm brrrm.....

For sole traders and partnerships, what is the position for those with say a 30 April year end? One would normally expect expenditure in the year to 30 April 2009 to rank for Capital Alloances in 2009/10, so if the sole trader bought herself a £150k Lamborghini in July 2008 would she get relief under the new rules?

Yes, you are correct. Driving school "cars" are not treated as cars for capital allowances purposes. Whether this will be reviewed I'm not sure as HMRC are clearly going to look at Section 81 CAA - they have indicated that they will take Motorcycles out.

(By the way for other readers, the driving school rule is in the Capital Allowances Manual at CA 23510)

Dear Rebecca,

Can we assume that driving school cars, fitted with dual controls will not be affected by new measures but will qualify for AIA and/or be included in main pool with WDA 20% (driving school car is very unlikely to cost more than £50K, I think)

Technical note has still not been published or at least not where it is easily accessible.

Please can you confirm that I am correct in assumption.

many thanks
Michele