Capital allowances..car depreciation

socket590

Hi There,
I am a self employed courier. I have been claiming for car depreciation over the past 5 years. (25% of reducing value).
I have now changed to a diesel van.
My question is, are the rules the same? I was told by the van dealer that the van depreciation would be allowed at 50% for the first year.
After the cars depreciation its value has reduced to £1600, but I got just £1000 in part exc. does that affect the figures.

Im hoping a tax expert reads this.

Rolo_Tomasi

There are two separate calculations:

1. For your existing car you can claim a 'balancing allowance' of £600 less any adjustment for private use.
2. For the new van you can either claim a tax deduction based on the number of business miles you do at 40ppm for the first 10,000 miles and 25ppm for the excess or you can continue to claim based in your expenses.

If you continue to use your existing method then you can probably claim the total cost of your van against your profits in the first year as it will come under the annual investment allowance limit of £50,000. There would be no 'depreciation' allowance in subsequent years though so this just brings forward the available tax relief.