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Capital allowance figures


I’m trying to complete the questions for capital allowance

If I buy a van in my tax year how much can I claim on capital allowance and how does this affect the final tax amount

Say I bought a van for 35k?

Is it a van or a car as defined by hmrc? Forget what we all know it to be, it comes down to the interpretation of it. Recent tribunal case involving coca cola found the vans were in fact treated as cars as they had been modified.

But if it is a van. Is there any private use? Or used solely for the business? What’s the co2 output of the van? These are all things you need to work out in order to get the correct amount.

But generally, you can claim 18% wdv each year.

This BTW is a tax return adjustment and doesn’t go on quickfile.

Definitely a van as its a 3.5t horsebox that is solely used for business use …would the emissions be on the mot?

How does the emissions affect the %

Could someone send me a working example and is it % of the total tax to deduct or % of the total cost of the van that i deduct?

My accountant has tried to explain it but not in lamens terms

35000 wdv 18% = 6300.

6300 reduces the net profit on which tax is due.

If you have an accountant, they should be dealing with capital allowances when preparing your tax return.

As I say, it’s not something that affects nor is inputted in to quickfile. It is a tax calculation.

I couldn’t give any more detail than that because I have no idea of any other income sources you may have or how it would affect your tax position.

If it counts as a van then you may be eligible to claim the entire £35,000 in one year under Annual Investment Allowance, but definitely check this with your accountant as (a) this only applies to vans, not cars and (b) it may not be tax-efficient to claim the whole lot in one year, depending on your overall profit and any other sources of income - essentially if you claim enough allowances to take your taxable income for the year below £12,500 then you’re “wasting” some of your personal allowance, and there are similar thresholds for national insurance.

Your accountant will be able to advise on whether it’s best to claim the full AIA, claim some of the value as AIA and write down the rest at 18% over the following years, or just use the normal writing-down allowances entirely and ignore AIA.

And as Paul says, none of this affects how you enter the asset and the depreciation in QuickFile, these allowances are purely a matter for your tax returns.

Is this different for ltd as its not my personal tax return?

A limited company doesn’t have a “personal allowance” but it still has access to AIA and there’s still likely to be a balance to find between how much to claim as AIA and how much to write down over future years, your accountant is the one best placed to advise.

That’s just it they are talking gobble de goob so no idea unless I pay them to do it for me which there isn’t a budget for

I would start with HMRC’s website. They have some reasonably good guides on tax. Here is a link to the basic information about capital allowances https://www.gov.uk/capital-allowances

Can I say though, if you’re running a limited company, you really should try and find the budget for an accountant. Accounts and tax for limited companies is far more complicated than sole trader, and given your previous question about share capital and retained profits, I’m concerned you don’t really understand enough to be able to prepare the accounts and tax return accurately.

If your accountant charges you each time you talk to them, or they’re not helping you understand the accounts (which is part of their job) then I suggest you find another one. There is a search feature here to help you find an accountant who uses QuickFile.

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I understand my accounts just fine…just never bought a van prior to now so this part is new to me…everything else is simple