I am trying to complete my husbands accounts for his tax return but I do not know how to account for the purchase of a new car.
I have read that as the car has dual controls fitted it doesn’t have to be categorized as an asset. Is this correct and if so, how do I categorize it.
I hope this makes sense.
As I understand it the distinction for dual control cars is that the usual rules about capital allowance percentages for “cars” don’t apply - they’re eligible for Annual Investment Allowance so you can claim the whole cost against tax in a single year. But that’s just for income tax purposes, for your accounts you’d depreciate it normally the same as any other vehicle.
NB I’m not an accountant, check with a real one if you want to be sure.
Spot on Ian
As these cars are modified for special purpose and are not commonly used as a private motor vehicle hence they qualify for AIA in tax return. Only thing you need to be careful on is the private use, significant private use can reduce tax allowances
Thank you both so much. I did think was the case, but just needed clarification.
Your help is much appreciated.