How do you record loss on car sale on Tax Return?

LOSS ON CAR SELL

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Can you please help me out with this one? My client bought a car for business purposes (he is a driver), for £8,000 and sold it for £5,000 (in the same financial year-both the purchase and the sell). How do I reduce the tax bill on his personal Tax Return with the loss of £3,000? On capital allowances is I put: Written down value b/fwd: £8000 Less: disposal proceeds: £5000,  I will remain with a residue of £3000 and it shows that I can claim WDA 6% of £180.... I`m lost... Thank you

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By SXGuy
05th Jun 2020 11:29

You are indeed lost. That's for sure.

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SDS
By Gia17
05th Jun 2020 12:44

Can someone please help me?

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Replying to Gia17:
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By Tax Dragon
05th Jun 2020 12:56

I though jcace had. What (more) do you need?

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Replying to Gia17:
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By Truthsayer
05th Jun 2020 13:05

The car goes into the special rate pool, so it gets the 6% WDA each year on the remaining £3,000 balance. There is no immediate relief for this balance, nor is there an option to depool the car as a short life asset. You should know things like this. If you don't, then you should not be preparing tax returns.

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By Adam12345
05th Jun 2020 12:58

It's probably in your clients best interest say they had some personal use of the car, on the presumption they are a sole trader. Then it will be in a separate pool and thus a balancing allowance will crystallise.

No private use, then £3,000 will be written down at the appropriate rate over a number of years.

You should complete some CPD!

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Replying to Adam12345:
SDS
By Gia17
05th Jun 2020 12:59

Thank you!

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Replying to Adam12345:
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By Truthsayer
05th Jun 2020 13:06

Er....that would be fraudulent. Don't do that.

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Replying to Truthsayer:
JCACE
By jcace
05th Jun 2020 13:21

It would be fraudulent if there was no private use, but if there was private use, it would be correct to treat it accordingly. Only the client knows (possibly).

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Replying to Truthsayer:
paddle steamer
By DJKL
05th Jun 2020 13:21

In reality it probably is not, I very much doubt with any car owned by any sole trader there is no personal use at all, certainly I never came across such an occasion.

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SDS
By Gia17
05th Jun 2020 20:18

I got it now. I have calculated the private use as well. Thank you very much for your help, guys. Highly appreciated... we all have to learn at some point how to do things right so don`t be mean... remember how hard it was for you at the begging when you came across new issues. PEACE and thank you again!

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By Bobbo
05th Jun 2020 20:53

I'm enjoying how the text on Gia17's profile picture has dodged the Sift language filter.

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