WDA for new car

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clearaccounting100
clearaccounting100 Registered Posts: 49 Regular contributor ⭐
in General accounting discussion
Hi i am helping my dad with his tax return, and i have had a brain freeze on the capital allowance aspect. He bought the car in Jan 09 for £8900. there is a 5% PU cost on the car. So i know i need to apportion to allow for that. However can i claim the full 25% WDA for the 1st yr even though he has only owned it since Jan 09 or do i have to apportion for the no of days the vehicle was owned in the tax yr? i think i have to apportion it, but my colleague thinks that i can claim 40% FYA. I don't think that this is right. Can anybody please clarify this matter for me please? All advice would be much appreciated. :001_smile:

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  • Gem7321
    Gem7321 Registered Posts: 1,438 Beyond epic contributor 🧙‍♂️
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    Yes you apportion the WDA and you can't claim FYA on cars, but the WDA was actually reduced to 20% for 2008/09
  • clearaccounting100
    clearaccounting100 Registered Posts: 49 Regular contributor ⭐
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    Thanks very much i didn't think that the FYA was right. :thumbup1:
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624 Beyond epic contributor 🧙‍♂️
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    You only need to time apportion the WDA if it's a short accounting period, if the asset is in the business at the end of the year then it qualifies for a full years WDA.

    So if your accounting period is for a full year you only need to restrict the allowance by the private usage (presuming not an expensive car).
  • clearaccounting100
    clearaccounting100 Registered Posts: 49 Regular contributor ⭐
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    the car is still an asset in the business and will remain as a business vehicle until it conks out, Therefore if i understand u correctly, he can claim the full 20%? The car cost £11250, so not cheap but not a rolls. Thanks for your help everyone :001_smile:
  • clearaccounting100
    clearaccounting100 Registered Posts: 49 Regular contributor ⭐
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    Sorry not £11250, £8900! doh! :lol:
  • Gem7321
    Gem7321 Registered Posts: 1,438 Beyond epic contributor 🧙‍♂️
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    If the accounting period is 12 months you can claim the full 20%, I'm sorry I read the original post wrong and assumed it was a short period.

    Ie. if the period was 1 February 2008 to 31 January 2009 and the car was bought on 1 January 2009 and still in ownership at 31 Januay 2009 you get the full 20%.

    It is classed as an expensive car if it cost more than £12,000. You've said it cost £8,900 and £11,250 but either way it's OK!
  • clearaccounting100
    clearaccounting100 Registered Posts: 49 Regular contributor ⭐
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    thanks for the clarification Gem, much appreciated :001_smile:

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