hi all
someone bought a taxi for 10k 20 months ago but only managed to start trading 6 months ago (family bereavement in meantime) - looking to submit SA in April 13
how can capital allowances be used for this scenario?
Replies (4)
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The taxi will be brought into the business for Capital Allowances purposes when the business commenced trading as pre trading expenses. Was it used for any other purpose?
The law says that
"expenditure incurred for the purposes of a qualifying activity by a person about to carry on the activity is to be treated as if it had been incurred by him on the first day on which he carries on the activity."
There was discussion in the office as to what "about" means, nut our view was that if it was not used for any other purpose, that you could bring in the cost.
If it was used for another purpose, then bring it in at market value.
In your case, I think you would bring in the full£10k.
When you say taxi...
... do you mean a car to be used as a taxi? Or do you mean a hackney style vehicle with no front seat?
In either case, was there any private use before the business commenced?
Arthur's answer, which refers to the rules for pre-trading revenue expenditure, will only be correct if the first use of the vehicle is use by the business.
I agree!
..
Arthur's answer, which refers to the rules for pre-trading revenue expenditure, will only be correct if the first use of the vehicle is use by the business.
That is why my post was - if it was used for another purpose, bring in at market value at the time of commecement!
I'm sorry...
... your post didn't make sense to me when I first read it, and I took it to be saying something different.
I can now see that it does say what you say that it says, despite the fact that it's still not making sense to me. :)