SE36750 - Deductions from emoluments: capital allowances: particular items of machinery or plant: motor vehicles: general

Section 36 CAA 2001

Here and in the following pages, the term 'motor vehicle' may be taken to include a car, a motor cycle or a van.

2002/03 onwards

Employees cannot claim capital allowances for a motor vehicle after 5 April 2002. For 2002/03 onwards, the only way an employee can get tax relief for using their own vehicle for work is by a deduction for mileage allowance relief (see SE31330 onwards).

2001/02 and earlier years

The capital allowance rules which applied to motor vehicles up to 5 April 2002 differ from those for other items of machinery or plant in four important ways.

• Motor cars and motor cycles do not qualify for first year allowances (see SE36620). Note that this exclusion applies only to motor cars and motor cycles. It does not apply to other motor vehicles.
• The writing down allowance on a motor car or motor cycle costing more than £12,000 is restricted to £3000 per year. This limit is applied before any adjustment is made for private use. If the period to which the allowance relates is less than a year, allow the appropriate fraction of £3000 (see example SE36920). Again, note that this restriction applies only to motor cars and motor cycles.
• The 'necessarily' test in Section 36(1) CAA 2001 (seeSE36520) does not apply to motor vehicles. This means that an employee or office holder who used their car or motor cycle for business purposes was entitled to claim capital allowances, even if they used it as a matter of personal choice.
• Balancing allowances (but not balancing charges) arising on the disposal of a motor vehicle are restricted if capital allowances have not been claimed in every year that the employee used the vehicle for work (seeSE36790).

As regards

• apportionments for private use, see SE36760
• the effect of contributions from employers to wear and tear on cars, see SE36770
• motor vehicles in a Fixed Profit Car Scheme, see SE36780.