Get some proper advice

The test for run of the mill expenses is "wholly, necessarily and exclusively" for business use.

For capex it's a bit more complex and usually the thinking is you take some cash off your balance sheet and replace that cash with an asset worth the cash you paid for it on your balance sheet (so no tax implications at all) - BUT then the value of that asset depreciates with time so it "costs" you X%, in the case of a car I think 18% is right, of its value each year and you write down your net book value by that amount and claim that against your corporation tax/income tax (I don't know if you're Schedule D or run a LtdCo).

However as an incentive for less polluting vehicles the tax treatment can be different and sometimes you can "amortise" the whole cost in just one year - so treating the purchase like a run of the mill expense.

The extent to which the Revenue would seek to apply the "wholly, necessarily and exclusively" is not clear to me in these circumstances and I'd strongly advise you get professional advice.

I am not an accountant, or a lawyer.

Posted By: Old Man on April 23rd 2019 at 19:48:30

Message Thread

Self-assessment advice please... (General Chat) - canarybirdie, Apr 23, 16:34:08
- Yes, if you look at Hmrc website (General Chat) - archroy, Apr 23, 20:16:47
  - I assumed he was a sole trader given this is his tax return (General Chat) - SimonOTBC, Apr 23, 22:32:31
- Get some proper advice (General Chat) - Old Man, Apr 23, 19:48:30
  - You’re over complicating it Old Man (General Chat) - SimonOTBC, Apr 23, 22:36:46
- I think the answer is yes (General Chat) - SimonOTBC, Apr 23, 16:40:58
  - Sounds right, not sure about 100% if only vehicle though. (General Chat) - Men without hats, Apr 23, 16:51:51
    - And remember cars are taxable as assets, vans aren’t. (n/m) (General Chat) - archroy, Apr 23, 20:19:21
    - The 100% allowance is for ultra low emissions only (General Chat) - SimonOTBC, Apr 23, 17:02:21
      - Oh ok, obvs for cars. Vans it's 100% anyway. (n/m) (General Chat) - Men without hats, Apr 23, 17:10:06
        
        Nephew has bought a new tranny and got the full amount. (n/m) (General Chat) - Men without hats, Apr 23, 18:49:04
        
        It might have changed but it’s only low emissions vans that get 100% in year 1 (General Chat) - SimonOTBC, Apr 23, 17:25:00
  - Just did a bit of googling and I’m pretty certain what I’ve said is right (n/m) (General Chat) - SimonOTBC, Apr 23, 16:46:51
    - Couple of other things though.... (General Chat) - SimonOTBC, Apr 23, 17:00:11
      - Thanks everyone... (General Chat) - canarybirdie, Apr 23, 17:39:16
        
        This also assumes you are in fact a sole trader (n/m) (General Chat) - SimonOTBC, Apr 23, 22:37:38

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