Ive been reverse engineering my last tax return to see how my accountant came up with the figures she did and ive pretty much done it aside from the profit/depreciation of vehicles.
Thing is, I bought the Charade before the last tax year ( 2008 ) but sold it last Feb so it falls within these accounts.
Do I show the loss on the purchase vs sale price or do I have to show the £1500 I got for it as profit for 2011. I actually made a £1700 loss on the car over its ownership.
Any clues in simpleton talk appreciate :-) i like to save my accountancy fees this year if poss!
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So you paid £3,200 for it in 2008/09 and received £1,500 for it in 2010/11?
It's a car, not a van? I'd therefore expect to see you get capital allowances of £640 in 08/09 (20% x £3,200) leaving you a balance of £2,560 and in 09/10 capital allowances of £512 (20% x 2,560) leaving a balance of £2,048. In 10/11 you would bring in proceeds of £1,500 giving you a tax deduction of £548 (2,048-1,500).
All these numbers (£640, £512, £548) will be restricted for private use.
I'd have thought you'd be much better off claiming 40p per mile (45p now) for business useage.
If it's a van then you would be able to write it off againt tax in 08/09 gaining a deduction for the full £3,200. Then when you receive £1,500 in 10/11 that is fully taxable. (Both numbers restricted for private use.)
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Thanks chap, I had a closer look at the balance sheet my accountant does with the tax return and she put the Charades value at £1854 in March 2010 so Im assuming its about a £300 deduction on her figures from last year.
I am now, with the Ignis, doing the cost per mile, but actually, my cars only cost 25p per mile all in, last years figures were around 18p per mile, the difference only down to my disaster period with old bangers. If I actually claimed 40 per mile, I think id be showing a loss. I presume I can claim a lower amount?
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>> If I actually claimed 40 per mile, I think id be showing a loss. I presume I can claim a lower amount?
I have no idea what you mean. The 40p (45p now) per mile is a statutory deduction* to which you are entitled in your tax return. So you don't have to faff with any other costs in your tax returns/keeping receipts etc.
It generally also gives a better result than using actual costs.
Any miles for which you use a bicycle you can claim 20p per mile.
www.hmrc.gov.uk/rates/travel.htm
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*For any pedants reading this, the statutory deduction actually only applies to employees using their own cars, but HMRC are happy to apply it to the self-employed using their own cars.
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I find it works out better for me to claim the actual cost of business use. I so I work out how much of the car is business use (usually around 70% of total distance covered) by using my mileage logs.
Then from that I can claim capital allowances, and this is the big gain for me, on a £6500 car, even when just claiming around 70% that is a fair chunk of my tax bill. Then I claim the same percentage of insurance and loan interest etc.
If you have a cheap car and do a lot of mileage then claiming per mile would probably work out better, in my case I have an expensive (relatively) car and only do 5k a year.
In your case Stu, if an accountant had to work out the capital allowances for all the cars you have bought and sold you would probably end up with a £2k bill! It was bad enough working out mine from the Corsa now thats sold.
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>> my cars only cost 25p per mile all in
Does the 25p/mile figure include anything for servicing, road fund licence, insurance, tyres? Sounds cheap to me.
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I notice from my last tax return, my accountant doesnt appear to have taken the £618 she put down for depreciation on the Charade off the gross profit, but has on the profit/loss sheet she does, so is the depreciaton not deductable?
Ive got the copy of the tax return she filed and it is def the net profit plus the £618 as the total taxable profit.
Capital Allowances boxes are empty aswell. Just curious on that one.
I did 15k thereabouts. Fuel, servicing, insurance and road tax came to £2931. Its actually about 19p per mile. There were no costs to buy them though as already owned, may be why it looks cheap RT.
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Cars sold re tax return 2011 - Mapmaker
