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Balancing Allowance on expensive car

Balancing Allowance on expensive car

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Client purchased an Audi 3.0 tdi in the 2011/12 tax year at a cost of £44,693. 10% WDA claimed for 2011/12 leaving £40,224 carried forward. 8% WDA claimed for 2012/13 leaving £37,006 carried forward. Car was traded in during 2013/14 against a new Audi. Part exchange allowance was £27,253. Can I claim £9,753(before private use restriction) as the balancing allowance? The car is the only business asset and 75% business use is claimed. 

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Replying to gainsborough:
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By jivebunny
14th May 2014 08:47

Balancing Allowance

Must be an age thing! Just seems so ridiculous that you are restricted to just over 17% of the original cost over the first two years and then you can claim the shortfall on disposal in one fell swoop!

Thanks for taking the trouble to respond.

 

 

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By martinscutt
14th May 2014 09:08

It is the only case left

after 'expensive' cars stopped being a thing. Without private use it would have gone into the special rate pool and linger there at 8% wda.

Given the ratio of sole traders to limited companies in our practice I do not think it will be a major problem for HMRC they can console themselves with all the clever clogs that incorporated and still bought big cars.

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