Depreciation would have been added back each year, and the CAs claimed in the year of purchase.
In this year's accounts you will show:
Motor - disposal £3000 Motor - depreciation on disposal £1500 Proceeds to sale £1500 - this would go as "loss on sale of fixed assets" on the PL.
Now if the vehicle was scrapped for NIL, you would leave the loss a £1500 on the PL, you would add it back for tax purposes, and there would be no further adjustment to the taxable profit.
However, if say £100 was received, you would reduce your PL loss on disposal to £1400. This would be added back in the tax comp, and £100 balancing charge would go on the tax return.
PS - One assumes this was a van or pool vehicle, as AIA wouldn't have been available on a car.
-- Edited by FoxAccountancyServices on Tuesday 15th of September 2015 02:29:19 PM
