SE36915 - Deductions from emoluments: capital allowances: example: writing down allowance: restriction of allowance in year employment begins

A maintenance engineer takes up employment in Birmingham on 6 October 1999. On 6 January 2000, after three months training, the engineer buys a car for use in the performance of the duties of the employment. The car cost £6500 and is used wholly for business purposes.

First year allowance is not due on a motor car, even though it was bought in a qualifying period (see SE36620). Writing down allowances may be claimed as follows.

Note that the writing down allowance is restricted by reference to the date when the employment began, not the date when the car was bought.

If the car is still being used for work at 5 April 2002 the engineer has the choice, in 2001/02 only, of claiming a 25% writing down allowance (25% of £4265 = £1067) 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 engineer will have a deduction for mileage allowance relief instead (see SE36520).