I wonder if someone could advise me. in 2012 my husband started an access lift company and purchased and access vehicle to start up @£16k which we claimed capital allowance for as it was 100% business)
The business didn't go anywhere and we had to close it down and sell the vehicle on (at a massive loss due to getting into debt to start it up - he is a sole trader)
He now needs to do final tax return and we don't know where or how to report this sale of the vehicle in the self assessment can someone please please help?
If you claimed 100% capital allowances on it in 2012 then will have a £0 Tax Written Down Value (this will depend on whether you have any any other assets you bought and what you claimed for them.)
If no other assets you have a base tax cost of £0. You compare this with what you sold it for say £10k, which results in a balancing charge of £10k on which you pay tax.
Although you may have sold for an accounting loss ie sold it for less than you bought it, from a tax viewpoint if you have claimed capital allowances at 100% you will need to pay tax on the sales proceeds in full.
It may not have been in your interest to claim the full capital allowances in 2012 if it used up some of your husbands personal allowance but too late to go back and look at that now. Hopefully you sought professional advice and can claim against your accountant/tax adviser if they didnt act in your best interest at the time.
Thank you for your response mark however we did not use anyone we did it as we did expect the business to succeed as he had contracts lined up which fell through after we bought the access lift we sold it for £9k and that was the only thing we claimed as capital allowance (we didn't make any profit that year hence closing down as all we incurred was debt) so I need to put the 9k in the £9k in the balancing charge box? This is the only thing we are confused with as to what to do with the sale of this vehicle
I forgot to add that this was sold at a big loss because we took a business loan to purchase the vehicle and the money went towards paying this loan off I am trying to make sure I get this correct and we have no money to pay for someone to do it as this was a bad business venture that sought nothing but debt so I want to make sure I get the sale of the vehicle in the correct place
If you didnt make any profit you would have been better not claiming the capital allowance as now you are left with a notional tax gain on which you will pay tax.
