HMRC confusing wording...

kodak1

Hi all,

Just looking for a bit of clarification on some HMRC wording (doing my tax Self Assessment). I'm a bit confused about the wording of the section on Capital Allowances (first year I have used this section). The section states:

"You can claim capital allowances for certain buildings and the purchase and improvements to equipment and machinery such as vehicles, tools, computers and business furniture used in your business."

But then later on it says:

"If you use cash basis, you can only claim capital allowances for the cost of buying cars. If you've previously claimed capital allowance for a car used in your business, you may continue to claim the allowance as a writing down allowance."

The wording of this suggests that if I am using the Cash Basis method (which I am) then I can only claim capital allowances for Cars (i.e. not for any other items like Tools). Am I correct in assuming that this is just bad grammar? Does it actually mean "if you've previously claimed capital allowance for a car used in your business please note that if you use cash basis you can only claim capital allowances for the cost of buying cars" (as opposed to leasing them maybe…)? 🤔

There are other precedents of bad grammar in the HMRC form, e.g. different sections state variously:

"Note: You cannot claim capital allowances if you claim the trading income allowance do not enter an amount here."

"Note: If you claim the trading income allowance, you cannot also claim other capital allowances, do not enter an amount here."

I don't think either of these sentences makes grammatical sense at all but fortunately they don't apply to me!

Thanks in advance for your thoughts 🙂

DRS1

This may help look under the Cars and other equipment heading

Cash basis: How to record income and expenses - GOV.UK

LITRG

Hi Kodak1

We cover how the cash basis works with capital purchases on our website here:

Accounts: cash basis | Low Incomes Tax Reform Group

Hope this is useful.