Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Vans attract AIA under the capital allowance regime so the purchase price of the new van can be entered as part of the AIA for the relevant accounting year. The old van, if sold, then any surplus made over the capital allowance written value will be a balancing charge and reduce the amount of capital allowances claimed in the same accounting period.
Does that solve your problem?
Correct; if the vehicle is leased then the leasing charge goes through the trading account like any other business expense. You had not mentioned this before. If leased a business expense, if bought then it's a capital allowance item, an AIA.
The balancing charge depends upon the particular capital allowance regime under which the old van was acquired. These have changed over the years and it will probably have received a First Year Allowance (now replaced by the AIA) and successive Writing Down Allowances. The sale price less the current brought forward figure in the capital allowance account would constitute the balancing charge.
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