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Corporation tax when you sold VAN

Corporation tax when you sold VAN

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Hi

Would like to ask about Corporation tax when you sold VAN.

Limited company year end 31 Dec every year.

If I brought van 2,000 on 1/1/2019 and depreciation 25% reducing balance
At 31/12/2019, I claimed this van full capital allowances 2,000 in company tax return CT600.

At 31/12/2020 van net book value was 1,125 and same days 31/12/2020 sold van for 2,000.
So, Gain on sale of this van in year end account is 875.

Question>>>
How much ***corporation tax (in tax return CT600)*** need to pay for Gain on sale of this VAN?

Is it 875*19% or 2000*19%?

Thank you very much in advance.
K

Replies (10)

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By Wanderer
14th Sep 2021 17:55

Your accountant will be able to explain it all.

Thanks (4)
paddle steamer
By DJKL
14th Sep 2021 18:02

Forget the accounts figures re cost and depreciation, re tax payable it will be based on the pool value. The key question is therefore ,is this for some reason a single asset pool or is it , more likely, part of a general pool? How does the £2,000 received compare with the pool value?

Thanks (0)
Replying to DJKL:
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By meekate
14th Sep 2021 18:30

Thank you for your reply and help.

The van claimed First Year Allowances 100% full 2000 in 31/12/2019 company tax return CT600.

I bought van 2000 on 1/1/19 and I also sold 2000 the same price in 31/12/2019

You mean I need to pay corporation tax 19% of 2000?

Thank you very much

Thanks (0)
Replying to meekate:
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By AdamMurphy
15th Sep 2021 06:35

You claimed actual First Year Allowance……?

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Replying to AdamMurphy:
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By meekate
15th Sep 2021 08:54

Thank you so much for your answer and helping.

Yes.

Thanks (0)
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By Tax Dragon
14th Sep 2021 18:19

Pools, addbacks (you don't want to be paying tax on both the accounts profit and the tax profit, after all!) etc etc.

Quite a lot of knowledge can go into dealing with even the simplest question.

Which is one reason why having a tame accountant help you can be such a good idea.

Thanks (2)
RLI
By lionofludesch
14th Sep 2021 18:19

You paid £2000, you got a £2000 allowance.

You got £2000, you get taxed on £2000.

All very logical.

Thanks (3)
Replying to lionofludesch:
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By meekate
15th Sep 2021 08:49

Thank you so much for your answer
Now my confuse is clear.

Thanks (0)
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By AdamMurphy
14th Sep 2021 18:29

Take a photo of the sale receipt, your software will give you the answer and boss it

Thanks (7)
Replying to AdamMurphy:
By ireallyshouldknowthisbut
15th Sep 2021 09:01

yup its all light touch now. let the computer do it all.

Thanks (1)
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