Hello, a client of mine is looking into paying about £32k for a hybrid which qualifies for a grant of £5000. It would also qualify for 100% WDA, so therefore corporation tax would be reduced greatly. My question is, when working out the capital allowances, will it be the puchase cost of the vehicle or the cost after the grant has been knocked off?
This is a really interesting question. Would you show the grant as income and the full value of the asset, or net off the asset. I think this one might need a call to HMRC for proper verification, just to be super sure
I think that Michelle was advising you to call HMRC on the clients behalf.
The issue is that if the client calls and then tells you then you are getting it second hand via the client information filter (I have after much study determined that clients only hear what they want to hear!).
In answer to your earlier question there are actually two elements to it :
- For P11D purposes your client will be taxed based on the full list price of the car, not the amount after the grant.
- The capital allowances will be on the amount paid, not the list price of the car (otherwise you would be getting th same relief twice).
HTH,
Shaun.
p.s. Your client does realise that electric cars are a lot more expensive to run than petrol cars don't they? The grant is simply smoke and mirrors. For that sort of money (ignoring the grant) they could get themselves something like a nice new 3 series and wait a few years until electric cars are a bit closer in cost to run to petrol cars before making the leap.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Yes you can ring yourself even if you are not agent as its just a general query. Don't have the client do it (good point Shaun, should've been more clear) as you want to hear it for yourself
