Electric Car Sale via business/tax

[batmanreturns]

I recently purchased an electric car via my business. It was registered and collected on 24th December 2021.
I've now sold it, my understanding is that the write down would take place in 2021 for that tax year and any losses it then created carried forward/back? Can anyone elaborate?

If correct, whats to stop you ordering a new electric car each year, getting the write down for tax purposes and you then get a 'free' car via the corporation tax saved?

[Countdown]

batmanreturns said:

I recently purchased an electric car via my business. It was registered and collected on 24th December 2021.
I've now sold it, my understanding is that the write down would take place in 2021 for that tax year and any losses it then created carried forward/back? Can anyone elaborate?

If correct, whats to stop you ordering a new electric car each year, getting the write down for tax purposes and you then get a 'free' car via the corporation tax saved?

Re: the first car that you bought - I assume you claimed 100% WDA. When you then sold it there should be a balancing charge (i.e you'll have to pay CT on the sale proceeds) so it's not completely free. You've also got BIK to pay.

[Eric Mc]

Is your business operated through a sole tradership/partnership or a limited company?

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Eric Mc said:

Is your business operated through a sole tradership/partnership or a limited company?

OP is referring to CT so that would suggest it's a Ltd Co.

[Eric Mc]

It would.

Perhaps he could clarify.

[batmanreturns]

Yes it’s a LTD Co

[Eric Mc]

Thanks.

With capital allowances, over the lifetime of the asset in the business, you effectively get the same allowances whether you claimed the AIA or not - because of the balancing charge levied on disposal.