Capital Allowances Question, Please Help?

Options
Pjdav
Pjdav Registered Posts: 27
in Business Tax
If the period of account is 15 month and your calculating FYA, how would you work this out?

For example: Arthur bought a car for £29,750 and 15% was private use. what would the allowance be?
FYA is only calulated for 12 months isn't ?

Sorry if this Doesn't make sense but I'm doing a practice exam and its hard to input the whole question. Any help will do.

Comments

  • PeterC
    PeterC Registered, Tutor Posts: 245 Dedicated contributor 🦉
    Options
    FYA is a rather misleading allowance as it has nothing to do with a "year". I like to call it the FTA (First Time Alowance); you get it when you buy the asset.

    Presumably this is a low-emission car, so you claim 85% of £29,750
  • PeterC
    PeterC Registered, Tutor Posts: 245 Dedicated contributor 🦉
    Options
    Another point. I assumed that Arthur was self-employed. If he is an employee, ignore the 15%.
  • Adele69
    Adele69 Registered Posts: 320
    Options
    I thought maybe @Pjdav meant with a 15 month CAP the CAP 1 would be months 1-12 when the FYA on 85% business use would apply assuming low emission vehicle and CAP 2 would be months 13-15.
  • Pjdav
    Pjdav Registered Posts: 27
    Options
    @PeterC & @adele69, thank you guys. I'm still confused as the answer says the allowance is 22,313?

    How did they get that ? I worked it out to be 25,288

    Just a bit more information, it says additions:27th April 2016,C02 75g/km & 15% private use. I've tried to attach a picture too.
  • Adele69
    Adele69 Registered Posts: 320
    Options
    I see you're using a BPP book, is this the FA2016? (as I think I have this at home, I did the AQ2013 exam though)
  • PeterC
    PeterC Registered, Tutor Posts: 245 Dedicated contributor 🦉
    Options
    They appear to have calculated 29750 - 25% = 22313 despite the question stating that the low emission car has 15% usage. It rather looks like an error in the book.

Categories

Privacy Policy