Accounting for disposal and purchase of vehicles

Discussion in 'Tax' started by Carnmore, 6 Jan 2019.

  1. Carnmore

    Carnmore Frequent Poster

    Posts:
    194
    I had a work vehicle for 8 years and disposed of it in December 2018, the final year of the capital allowance claim. The annual claim is €867 which will be claimed for 2018. The vehicle was sold for €3000. It appears the vehicle was sold for a 'profit'.

    How is this accounted for in an income tax computation and capital allowances computation?

    A replacement vehicle was purchased in December 2018.
    Can capital allowances be claimed against two vehicles in the same year?
     
  2. RedOnion

    RedOnion Frequent Poster

    Posts:
    2,593
    The 'profit' on disposal is called a balancing charge, and is subject to tax. It's a way of clawing back the extra relief you received.
     
  3. Carnmore

    Carnmore Frequent Poster

    Posts:
    194
    Thank you RedOnion.

    Income tax? If so should it be listed as income?

    Any thoughts on the rest of my post?
     
  4. RedOnion

    RedOnion Frequent Poster

    Posts:
    2,593
    Essentially it's a negative capital allowance, if that makes sense?

    Yes, you can have multiple vehicles in the same year.
     
  5. Carnmore

    Carnmore Frequent Poster

    Posts:
    194
    Sorry but no...:confused:. How should it be listed in the tax computation?
     
  6. RedOnion

    RedOnion Frequent Poster

    Posts:
    2,593
    As a negative capital allowance...
    Instead of a capital allowance of +867, you've actually got -2,133 for that vehicle.
     
    Carnmore likes this.