BTC Help - lease payments

lisaloo

In the June 2009 paper section 2 there is a calculation for leases payments when adjusting the profit - this is something I don't seem to rememver covering and can't find in the book, can anyone help me out?

mini_schnauzer

If the lease car is over £12,000 it is class as an expensive car.
Therefore you have to add back the disallowed portion of the lease payment.
Calculation as follows:

1/2 x (car cost - £12,000) divided by cost of car then multiply by annual lease payments

The result is the amount to add back.

Good luck, I'm doing BTC tomorrow as well!

talinka

Hi,
I agree with the above reply , however if it's an operating lease - the expedinture is classed as revenue and therefore is not allowable.

lisaloo

Thanks, all makes sense now! Good luck for tomorrow!