SE36920 - Deductions from emoluments: capital allowances: example: writing down allowance: restriction applying to cars costing over £12,000
A maintenance engineer takes up employment in London on 6
January 2000. On the same date, the engineer buys a car for use in
the performance of the duties of the employment. The car cost
£15,000 and it is used wholly for business purposes.
Writing down allowances may be claimed as follows.
|
|
| £ |
| 1999/00 | Cost | 15,000 |
|
| Writing down allowance |
|
|
| (Restricted – see SE36650 and SE36750) |
|
|
| 3/12 X £3000 = | 750 |
|
| Residual value carried forward | 14,250 |
| 2000/01 | Writing down allowance |
|
|
| (Restricted – see SE36750) | 3000 |
|
| Residual value carried forward | 11,250 |
| 2001/02 | Writing down allowance |
|
|
| (Restriction not needed as residual value not more than £12,000) |
|
|
| 25% of £11,250 = | 2813 |
|
| Residual value at 5 April 2002 | 8437 |
As in the previous example, the employee has the choice, in
2001/02 only, of claiming a writing down allowance (as shown above)
or calculating a balancing allowance or charge based on the
car’s open market value at 5 April 2002 (see
SE36791).
Capital allowances will not be due on the car for 2002/03
onwards. The employee will have a deduction for mileage allowance
relief instead (see SE36520).-
