I’m very grateful to Julian Hall from Manchester Audi for pointing out an inaccuracy in my story on the new corporation tax rules: Business car tax accounting changes.
In my story I had originally suggested the rules placed a £3000 upper limit on the yearly write down allowance. As Julian pointed out, this is not the case. There is no upper limit.
“The point about the new writing down allowances is the fact you could be writing down your business car for 10 or 12 years,” said Julian, local business development manager, Manchester Audi. “The old balancing charge on the sale of the car has gone.”
Julian’s right again. If you buy your business cars you will be writing them down for possibly many, many years. In the case of business cars with emissions above 160g/km, where only a 10% reducing balance write down is permissible, it could take between 15-20 years to write the car down.
It’s something you need to consider when talking to your accountant, leasing broker, or helpful business manager at your local dealer when considering your next business car.
Switching to car leasing could be a better option.
Watch out for our tax special – a free download called The BIG Tax Change – coming soon.
Error pointed out by reader Julian Hall