One of my clients is a driving instructor who has decided to pack in (he was only doing it part time)
He had the vehicle on hire purchase and when he started the business took over the payments. I have been doing the car expenses at 45p a mile because his private mileage was high.
He has now sold the car and used the money to pay off the hire purchase, and he has put both transactions through the business.
Should the £6k plus be treated as income or can I allocate it against the higher purchase payments ie receipt followed by expenditure to pay the loan off.
My worry is that if its income the expense can't be included and he will incur an extra £1200+ tax liability,
