|
|
|
|
T76 - Capital Allowances on cars to be linked to CO2 emissions Expenditure on cars with CO2 emissions above 160g/km will attract 10% writing down allowance (WDA) while expenditure on cars with CO2 emissions of 160g/km or below will attract 20% WDA. In addition to this, the 100% first year allowance (FYA) for the cleanest cars has been extended to 31 March 2013, and the qualifying CO2 emissions threshold has been reduced to 110g/km. This is not all as straight-forward as it seems however, as when you finally sell your car, if you have enjoyed a FYA of 100%, there will be some claw-back of tax benefits received. Example: Robin buys a new Toyota Yaris 1.4 D-4d for £11,000 which has CO2 emissions of 109g/km on 7th April 2009. He uses his car 50% for business use. He is a higher rate tax payer and uses the car for three years before selling it for £3,500. Year 1 – Robin will get capital allowances on this car of £11,000. He will get tax relief on half of this at his highest rate of 40% = £2,200. Year 2 – The car has a tax written down value (TWDV) of £0 so no tax relief on the actual cost of the car. Year 3 – He sells the car for £3,500 when it actually has a TWDV of £0 – therefore he is deemed to have made a £3,500 surplus on it and tax will be clawed back on half of this as he uses his car 50% for business. Therefore additional tax to pay of £700. Total tax relief over the life of car ownership in the business - £1,500
|
"He (Mac) has helped me as my practice has expanded from single-handed to a six surgery/8 dentist practice." "Mac is always available to "pick his brains" and has a solution for any problem!" "He always offers sound independent advice on all financial and taxation affairs in a way that is easy to comprehend and follow." "He has helped me through my early associate days and is now proving invaluable in my journey towards practice ownership." "There is never anything I do in business or personal finance without first consulting Mac." |
|
We take great pride in our service, and would be delighted to invite you for a free 1 hour, no obligation meeting at our comfortable offices. Simply call us on 020 8346 0391 to arrange a mutually convenient time. This web-site was last updated on 17/01/2012 Specialist Dental Accountants for over 27 years. Copyright © 2003-2011 Mac Kotecha & Company. All rights Reserved. The information on this site is for general guidance only. It is essential to take professional advice on specific issues about their impact on any individual or entity. No liability can be accepted for any errors or omission or for any person acting or refraining from acting on the information provided on this site. We can still help you if you're not a dentist. Please click here
|
