WDA for new car

clearaccounting100

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:

Gem7321

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

Thanks very much i didn't think that the FYA was right. :thumbup1:

Bluewednesday

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

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

Sorry not £11250, £8900! doh!

Gem7321

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

thanks for the clarification Gem, much appreciated :001_smile: