Business Newsletter

OWNERSHIP pre 6th April 2009    

Buying on the balance sheet could claim capital allowance of 25% of the tax written down value or maximum of £3000 p.a.  

i.e.  Car costing £23000 at 142 g/km

Keeping for 3 years
Yr 1 £3000
Yr 2 £3000
Yr 3 £3000
= £9000 offset
Remainder £14000 on bal sheet
Sold for  £12000
Balancing charge £2000 claimed on balancing charge

OWNERSHIP from 6th.April 2009

Restrictions on + / - 160g/km
Over 160 allowed 10% per annum Under 160 allowed 20% per annum
No balancing charge i.e. retain 5 /10 yr

i.e. Car costing £23000 at 142 g/km

Keeping for 3 years
Yr 1 £4600
Yr 2 £3680
Yr 3 £2944
= £11224 offset
Remainder £11776 on bal sheet
Whatever you sell for there is No balancing charge and will remain on the books until totally written down to nil balance

CONTRACT HIRE pre 6th April 2009

When the car is leased and cost more than £12000 you claim a % of the rental against corporation tax

Formula:  

£12K + the purchase price
 Twice the purchase price    x 100 = %

i.e. Car costing £23,000 with 142 g/km say

£309 pm ( 3/35 payments ) non maint

Can Claim 76.09% of the rental of £309 pm x 38   

Therefore £8934.48 allowable

CONTRACT HIRE from 6th.April 2009

Over  160 g/km  85% of rentals allowable and Under 160 g/km 100% of rentals allowable

Rental is £309 per month.

i.e. Car costing £23,000 with 142 g/km say

£309 x  38  =  £11742

Therefore 100% allowable = £11742