Capital Allowance/Car

Re:Capital Allowance/Car

Is it possible that the previous accountant claimed mileage allowance? In our practice we rarely claim the car as a capital item because the mileage allowance at 40/25p is often more beneficial to the client. If the previous accountant has claimed mileage allowance, you cannot now claim capital allowances until the car is replaced with a new one.
Don't forget that if you are claiming mileage allowance, you cannot claim repairs,RFL and insurance. The mileage allowance is meant to cover this. Also, if you elect to claim mileage allowance, you cannot claim back any vat paid on the purchase of the vehicle.

Kind regards
Peter

Re:Capital Allowance/Car

First year allowances are not available on cars unless it is one of those with low CO2 emmissions, or hydrogen refuelling equipment - though I have never come across these as yet.

Presumably the market value of the car may be less than £12k and therefore you would just claim the 25% WDA. If the market value can be proved more than £12k then you would introduce the car into its own pool on the capital allowances computation and claim £3,000 capital allowances until the tax written down is £12,000 or less.

In terms of doing this i.e. bringing the car into the company - then be careful because this will mean a car benefit and possibly a fuel benefit, so just do some calculations to make sure your client isn't going to be out of pocket by having a company car as opposed to owning the car, paying for all running costs of the car and claiming back mileage.

Best wishes
Steve

Re:Capital Allowance/Car

You can't claim FYA now, only when it was purchased.

You are still within the time limit to repair the 2006 Tax Return but you will have to make a claim for Error or Mistake relief to amend earlier years returns.

It sounds like it would be worth doing so to me.