HP Asset handed back - CA treatment

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Hi,

A client had a car on hire purchase for which his previous accountant claimed CA. At the end of agreement they handed the car back and leased a new one (not a HP this time). There was no balance outstanding on HP liability as it was paid in full (all dealt with by previos accounting firm, so I'm not sure how accurate it is). 

I would have thought the disposal proceeds for CA should be zero, resulting in balancing allowance to be claimed.

Can someone please advise if I am right?

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RLI
By lionofludesch
04th Dec 2018 08:30

Why would they hand the car back if they owned it ?

Why wouldn't they go to wellbuyyourcaroffu.com ?

Two more likely possibilities spring to mind.

1. There was a balloon payment on the HP, not properly accounted for.

2. The car was used as a deposit on the new agreement.

Check the paperwork.

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Replying to lionofludesch:
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By BarbaraIA
04th Dec 2018 08:40

Thank you, I hope the business still has the contract!

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Replying to lionofludesch:
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By BarbaraIA
04th Dec 2018 08:40

Thank you, I hope the business still has the contract!

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