Ltd Co. client has taken out a finance lease on an Iveco Luton Lorry. I know he cannot claim AIA on it due to the finace lease but is he entitled to take 18% WDA on the main pool?
Thanks
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Dont start this BS again Ruddles!
Tell us chapter and verse why no AIA.
I think you are a bluffer.
It's not BS.
If you think that someone can claim capital allowances when they do not own the vehicle, it is you that is talking out of your bovine rear.
If you want chapter and verse, I suggest that you look at CAA 2001 s11(4)(b).
Er ...
Because he doesn't own the vehicle?
Whether or not he owns the vehicle is what I'm trying to establish.
The OP certainly seems to think WDA is due.
Although, on re-reading it, it seems that he's asking a totally unrelated question about the main pool.
I like the added irrelevant detail that it's an Iveco lorry.
Why, all it is saying is,
"I have company lorry",
pesky apostrophe, space and use of abbreviation"
How many times do we have people on here not using the right words ?
If he could claim WDA, he would have to own the wagon, wouldn't he?
Always best to check the OP knows what he's talking about.
The OP mentioned 'finance lease' twice in his question, so I saw no reason to state my assumption that he was indeed talking about a finance lease and not some other sort of agreement that is not a finance lease.
But you're right - the mere fact that he thinks that WDAs may be available on a finance lease asset suggests that he doesn't have a clue and that it could in fact be some other sort of agreement that is not a finance lease.
I agree - but I don't see why we should always have to question in our minds whether or not the OP is asking the right question.
Someone asks a question, and they get a response based on the information provided. If they were a paying client, then I may well ask for clarification/confirmation/further information. But they're not, so they'll get a response from me based on what they've provided. If the answer proves to be incorrect because they given wrong or insufficent information why should I care?
He can either claim capital allowances on the vehicle or not. If he can claim WDA then he can claim AIA.
If it is a finance lease then it is shown in the accounts in the same way as a hire purchase. However the tax treatment doesn't always follow the accounting treatment.
Capital allowances can only be where the lease qualifies as a "Long Funding Lease" see HMRC Manual
https://www.gov.uk/hmrc-internal-manuals/business-leasing-manual/blm20010
If the lease doesn't qualify as long funding then the asset should be depreciated over the term of the lease, and the depreciation is NOT added back in the tax comp. This in affect gives the relief for the rental payments each year.
One point I forgot to mention, if the lease is not more than 5 years it can never qualify as a long funding lease.
I love how, through an accident of history, the town of Luton in Bedforshire now describes a type of motor vehicle.