Loss On Company Car
Discussion
My company bought a new car last year for £28k, we have decided now to sell it, been bid £15k, but owe £21k, is the shortfall tax deductable?
The tax treatment on the loss on the disposal of an asset is dependent on whether the asset was
owned outright by the business
being acquired using a bank loan or HP
being leased
There are also special rules for cars and extra special rules for "expensive" cars. An "expensive" car is a car which had a capital cost to the company at the date of purchase (or the date the agreement commenced if under some sort of finance arrangement) exceeding £12,000.
The clearing of a loan itself is not a buiness expense so there is no tax relief for that particular transaction - although there may be some element of relief avaiable on the disposal - dependent on all the factors mentioned above.
The tax treatment on the loss on the disposal of an asset is dependent on whether the asset was
owned outright by the business
being acquired using a bank loan or HP
being leased
There are also special rules for cars and extra special rules for "expensive" cars. An "expensive" car is a car which had a capital cost to the company at the date of purchase (or the date the agreement commenced if under some sort of finance arrangement) exceeding £12,000.
The clearing of a loan itself is not a buiness expense so there is no tax relief for that particular transaction - although there may be some element of relief avaiable on the disposal - dependent on all the factors mentioned above.
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