BTC 2007 Exam paper - Error?

pernickety Registered Posts: 47 Regular contributor ⭐
Can anyone please help on section 2 - It clearly states that the Volvo is used for 30% private usage.

The question asks you to work out the capital allowances, for an 8 month period for the business. The capital allowance for the Volvo would therefore be:- £16030 x £3000 (the restricted allowance available) x 8/12 which is £2000. This would then come off the £16030 to c/f to the next trading year. The allowance however would have to be further reduced to reflect business only use £2000x70% (the busiess only portion), or that is what I thought I had been taught? However, after taking ages to be careful to work out all involved, I then looked at the answer and they had £2000 being carried over as an allowance!!! Can someone else have a look and let me know if I am wrong here. I just dont see the point in telling you in the question that the Volvo is 30% private use, if then it is ignored! So frustrating...

Really would appreciate another pair of eyes to have a quick look.:001_tt1:


  • AdamR
    AdamR Registered Posts: 668 Epic contributor 🐘

    No deductions are made for private use if it is a Ltd company - the 30% figure is simply there to trip students up. Sole traders and partnerships would be restricted in the way you described however.

    Hope this helps
  • pernickety
    pernickety Registered Posts: 47 Regular contributor ⭐
    Oh no, I sat there ages looking at it, completely missing the obvious. It was driving me mad. There is so much to consider, I completely missed that it was not a sole trader, thanks for taking the time to look.:thumbup1:
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