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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4723
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have 3 sources of income

Customer Question

I have 3 sources of income 1 A vat registered courier company T/O £1000 2 A Vat registered consultancy T/O £ 6000 3 Working in Construction T/O £35000 I purchased a van for the courier business for £10000 on personal hp of £250p/m and a car for £32000 on personal hp of £600p/m neither in the company name. The van is now used for construction as the courier business didn`t do well with no personal use . The car is used 50/50 personal/ business. If I use simplified expenses I can claim £10000 across all 3 incomes. My question is can I claim more ie £10000 + £16000 capital expenses using cash basis accounting.

Submitted: 1 year ago.
Category: Tax
Expert:  Nicola-mod replied 1 year ago.
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Customer: replied 1 year ago.
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Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to the site. Thank you for your question.

You wish to claim capital allowances on both vehicles and claim 100% in the first year.

I am sorry to say but it does not work the way you would like it to be.
You can claim up to 100% first year allowance (annual investment allowance) for commercial vehicles i.e. a van used for business purposes.

As far as cars are concerned, you claim capital allowance based on CO2 emissions of the car and the date you bought it.

If you are trading as a LTD company and wish to claim capital allowance on the car, you should be mindful of the fact that the car would be regarded as a benefit in kind because there is private use.

As it is the first time you are considering claiming capital allowance on it, you may wish to consider charging the company for business mileage based on HMRC tax free rates.

Your question is -
If I use simplified expenses I can claim £10000 across all 3 incomes. My question is can I claim more ie £10000 + £16000 capital expenses using cash basis accounting.

If you use your own vehicle across the three businesses, you can claim mileage based on business miles done for each business, but you can't claim £10,000 across all three incomes as a lump sum. You can't spread capital allowance across three separate businesses.

More information on capital allowances can be found here

https://www.gov.uk/capital-allowances/annual-investment-allowance

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

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