Motor vehicles owned by business -2009/10
April 27th, 2009
The status of motor vehicles owned by businesses took a further hammering in the last PBR and budget.
Cars have not qualified for the Annual Investment Allowance since it was brought in last year and are subject to the new Capital Allowances rules (less advantageous than the old ones). They now get a First Year Allowance of 40% (for this year only; 20% in any other year) on the business element, and 10% on the reducing balance thereafter. However when the car comes to be sold then there is no longer a balancing allowance available for the full remaining cost; instead the business only gets 10% of the remaining balance after sale proceeds deduction - the rest is lost.
Consider providing employees with a car allowance rather than a car - it will usually turn out to be cheaper for all concerned (unless the car really is needed for business and has high mileage).
The content of this article is for general information only. It should not be relied on and action which could affect your business or personal circumstances should not be taken without appropriate professional advice.
Articles by month
- November 2011
- March 2011
- January 2011
- November 2010
- June 2010
- April 2010
- February 2010
- October 2009
- September 2009
- April 2009
- March 2009
- February 2009