Writing down allowance/balancing allowance

MadMac_2

I sold my car last year (used 70% for business purposes) and made a loss on the sale of the WDA for last financial year. I then bought a new car (not worth much) which will then be written down with a WDA of 70% business use as previous. What I am confused about is what to do (if anything) with the loss I made on the car sale? Do I leave that off my self assessment form completely - or add the loss in somewhere? I have been sent a short tax return form for 2008 already - do I need anything different? Hopefully someone knows the answer - or has been there already!

System

Don't know if this will be off any use to you but there is an example on page STRG9 on this link - http://www.hmrc.gov.uk/worksheets/sa210.pdf

MadMac_2

Thanks for the link, but I do have those guidance notes already and in that example, there is only one total for the balancing allowance and capital allowance - I've got two totals for just the capital allowance?

mrkbrrws

When you say "made a loss on the sale of the WDA" I assume you mean that you sold the car for less than the value you carried forward in the previous year's capital allowance calculations.

The difference is called a balancing allowance and the business proportion (70%) of it can be claimed to reduce your profit.

From the guidance notes it appears that you add this amount to all your other capital allowances claimed and put in box 3.9.

MadMac_2

Yes, I made a loss on the written down balance brought forward. So can I just add the difference to the capital allowance including starting to write down my replacement car? I think that is what you are saying, but just want to double check before I put it on the form. Gulp!

mrkbrrws

Yes that's right, but you can only add the business proportion of the balancing allowance (i.e. 70% of it).