Car expenses query

[missymood]

This may be a tricky one!

Bought a car on eBay and won it for £1000 but 4 weeks later engine has seized and will now cost too much to fix.
Have payed out 6 months tax
Insurance
Service
And also tow charge to get it back to my home
Emergency Rac too!

The car was for childminding only so can i put it all through my books and then get another car?

Feel really fed up but garage said it could of happened anytime

[aly]

depends if you do the car mileage or the cost of car?

[MrAnchovy]

If you've only had the car for four weeks you won't have committed to mileage or actual costs yet, and unless you have done monster mileage you will want to claim actual costs!

Fuel, servicing, insurance and tax (less any refunds you get) you can claim as expenses. You can claim the whole cost of the car (less any scrap value) as a Balancing Allowance in your tax return - this goes in the box 'Other Capital Allowances'.

If there was any private use, you will need to pro-rate all the costs.

[aly]

if she claims the cost of the car what happens with the new car, does she carry on the same way?....I am under the impression that whichever way you choose you have to carry on {especially in the same tax year?} is that right?

[MrAnchovy]

You have to carry on with the same method for the same car, but you can switch when you get a new car.

[missymood]

If you've only had the car for four weeks you won't have committed to mileage or actual costs yet, and unless you have done monster mileage you will want to claim actual costs!

Fuel, servicing, insurance and tax (less any refunds you get) you can claim as expenses. You can claim the whole cost of the car (less any scrap value) as a Balancing Allowance in your tax return - this goes in the box 'Other Capital Allowances'.

If there was any private use, you will need to pro-rate all the costs.


Thanks that is what I will do:thumbsup:

[MrAnchovy]

Hmmm, just reread what I posted. You can only claim (part of) the balancing allowance if there has been some private use.

If there has been no private use the cost of the car goes into a 'pool'. If you buy another car exclusively for business use, the cost of the new car is also added to the pool and you can only claim 10% of the value of the pool this year. But if you buy a new car that has some private use, that car goes into its own 'pool'. Or you could decide to only claim mileage on the new car.

That way the value of the 'pool' will be only £1,000 and using the Small Pools Allowance you can write it off (£1,000 is the limit for this allowance) - it goes in a different box on the tax return called 'Allowance for small balance of unrelieved expenditure'.

For more information on Capital Allowances, see this HMRC leaflet (http://www.hmrc.gov.uk/helpsheets/hs252.pdf).