Hi all. Read this forum whenever I get a spare minute, and try and answer questions for people if I can - Now its my turn though!
I am doing the books for hubby, who is self employed, and uses his car about 80% of the time for work. Currently I log all his vehcile expenses; fuel, road tax, servicing etc, and then take 80% into the accounts. However - he is considering changing his car soon for a newer one, with less milage on it. My question therefore is this: Can I put the purchase cost of this into his accounts, based on the percentage he uses it for business? He is not VAT registered, so nothing to worry about there, and he will not be taking a loan out to pay for it, so no interest element either. Just wondered if it could be classed as an asset of the business, even though its not used 100% for work, and therefore help to reduce his tax bill down next year a little
I've posted vehcile purchases before into clients accounts - just can't get my head around my own affairs
You should be able to claim capital allowances on 80% of the value of the car as that is the percentage of business use. What the allowances are will depend on the actual car and on its CO2 emission. Have a look at helpsheet 252 on HMRC website about the calculations on vehicles with private use. It is something like use of single pool for cars and calculate allowances on this way... Hope this helps
When you say you take 80% into the accounts, do you mean you only record 80% of the value? I would put all the receipts into the business and then disallow 20% on the SA calcs, as I would imagine HMRC would be happy to see some disallowance rather than none, may lead to them taking a look.
Cars are not open to AIA so I would agree with Attila and you would right down 80% of the 20% of the value each year in a seperate pool.
