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Ceasing self-employment

Chauffeur business disposing a car

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My new self employed client who has a chauffeuring business thinks of closing down and considers two options:

Keeping privately a car with about £20k WDV. This is the only asset of the company, over 160g/km CO2 car written down previously at 8%.

Selling a car for £15k which would result in balancing allowance of £5k (ignoring here private use adjustment).

If he personally keeps the car, effectively with Nil disposal, taking it out of the business, does that mean he gets £20k balancing allowance? It does not seem right... Will that need to go on the return as a gift received or something? Will it make any difference if the business sells the car to his wife at a nil amount?

I normally deal with limited companies and this does my head in.

Many thanks in advance for any enlightement...



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20th Jun 2017 08:31

If he keeps the vehicle (or sells/gives it to his wife) it is treated as though the business has disposed of it at its market value.

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20th Jun 2017 08:36

If the asset is gifted then the market value should be recognised.

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20th Jun 2017 22:53

Thank you very much. That makes much more sense.
If anyone in the future wanted more details on this

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