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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4973
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I run a busy Pet Service business supplying walks, visits,

Resolved Question:

I run a busy Pet Service business supplying walks, visits, daycare, holiday boarding and even manufacture and sell our own pet food across the UK. I am looking to purchase a new Motorhomes and have these fitted with a safe area for dogs to travel with their owners on holiday so that we can offer a new service; likely set this up as a new business working alongside out others. Pets are often an integral part of a family and a motorhome set up for safe travel of a dog allows them to holiday with the owner.
From reading the rules on the HMRC (Im based in UK) I read that Motorhomes are treated as CARs and as the the C02 emission of the motorhomes we are looking to buy are around 192g/km I am just checking what written down allowance and pool these would go into. Im guessing becasiue of the 192g/km C02 emissions these would go into the Special Pool so would get a written down allowance of 8% for each year - would this be correct?
For cashflow we are looking to finance these over three to five years; I assume we would also be able to claim the Capital Allowance plus the Interest on any finance payments?
We would look to renew the vehicles after 3 years to keep them mechanically sound and fresh.
Any advice and help on this would be very much appreciated.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question. Your understanding that- Motorhomes are classed as cars- writing down allowance of 8% would apply for capital allowances purposes- you would be able to claim interest paid on finance payments are all correct. Confirmation of this can be found herehttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323611/hs252.pdf It is your intention to replace vehicles every three years.. there would be balancing allowance available in the year of disposal (cost less disposal proceeds less capital allowance claimed), 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.
Customer: replied 1 year ago.
Thanks I'm happy knowing I was in the right area. I wonder if you could just explain (in layman terms) what the balancing allowance is when we dispose of the vehicle? Im assuming by that you mean the initial cost of the vehicle, say £42k, less the price we sell the vehicle for, less any capital allowances claimed from 1st year of ownership to date of sale leaving the balancing allowance figure. If this is a negative figure is this used as deduction or an expense for tax purposes, and if a positive figure I assume this is a gain so fully taxable? Thanks again for your very prompt reply, much appreciated.
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply. I will revert to you with a worked example later this evening. Many thanks
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your patience.Attached is worked example of balancing allowance and balancing charge. I hope this is helpful and answers your question.I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it by Just Answer.
taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Thank you that is greatly appreciated.
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer. Best wishes

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