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Post Info TOPIC: Driving instructors SA
Zigs


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Driving instructors SA
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Hi everyone

Ive got a friend who is a driving instructor, she purchased a car this year for her work.  She asked me about allowances and i havent mentioned anything yet, thought id get it checked out first on the forum.

My understanding is that she can capital allowances on her car and deduct this from her amount of tax payable.  Becauses she is self employed therefore her business is small, would she be entitled to 100% capital allowance?

She has said  her income is very low as she works hours to suit her childrens school.  If her income is less than the capital alowance amount, she will have a loss, and can carry that against her following years income?

am i on the right track or have i totally diverted idea

Any response to this would be greatly appreciated

Zigs

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Dustin57


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Hi Zigs

Motor vehicles are treated differently to plant and machinery, and there is a maximum claim for motor vehicles of £3,000 for capital allowances per annum. If your friend uses the car for both business and personal travel there may be a personal add back on this claim.

If she makes a loss, yes, it is possible to carry this forward to offset against future profits.

Dustin

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"People who are exceptionally good in business arent so because of what they know but because of their insatiable need to know more"
Zigs


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Hi Dustin

Thanks for that, youve eased my mind smile

Zigs

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Zigs


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Hi Dustin

Sorry to come back to you, is the first year allowance only applicable to plant and machinery?

Also is the rate 20% for this year?  ive looked it up and have read it is 20% from April 08 but wanted to check.

If she has had the extra (he man pedals) i think theyr called fitted herself after purchasing the car, are they classed as plant machinery?

Sorry to bombard you with questions, but wanna make sure im giving the right info.  Its my own fault for not looking through my books.

Zigs

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Dustin57


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Hi Zigs

There is a 100% allowance for Plant and Machinery, and theres also an Annual Investment Allowance on the first £50K of investment that doesn't fit into the P&M allowance. Other plant and machinery receive 20% writing down allowance, with the cars allowed a max of £3K.

Yes optional extras should be capitalised. However they would be included under Motor Vehicles as opposed to P&M.

Dustin


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"People who are exceptionally good in business arent so because of what they know but because of their insatiable need to know more"
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