HMRC - Depreciating motorhome on your accounts - what percentage did you use?

[Mad dog]

Hi, we use our motorhome for our business as well as leisure, therefore I can depreciate the business percentage on our accounts. Cars can only be depreciated at 6% / year but vans at 18%, my accountant thinks it would be classed as a van (ours is a 2019 PVC professional conversion) but suggests going half way (put it through the books at 12%), but I've read that HMRC may classify them as cars .... I'm struggling to find a definite answer!

Has anyone put them through their books or advise what they have done please?

 

[Nasher]

Link here says it's classed as a car:

Claim capital allowances

Claim capital allowances so your business pays less tax when you buy assets - equipment, fixtures, business cars, plant and machinery, annual investment allowance, first-year allowances.

www.gov.uk

 

[Happy1]

Would expect your accountant to be able to get a definitive answer from HMRC all they need to do is ask them?

 

[gus-lopez]

Cars can only be depreciated at 6% / year

When was the last time a car only depreciated by 6% /year ? Has it even ever happened ?

 

[Captain Yoghurtpot]

Hi, we use our motorhome for our business as well as leisure, therefore I can depreciate the business percentage on our accounts. Cars can only be depreciated at 6% / year but vans at 18%, my accountant thinks it would be classed as a van (ours is a 2019 PVC professional conversion) but suggests going half way (put it through the books at 12%), but I've read that HMRC may classify them as cars .... I'm struggling to find a definite answer!

Has anyone put them through their books or advise what they have done please?

I wish I could!

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[2x2camper]

Hi, we use our motorhome for our business as well as leisure, therefore I can depreciate the business percentage on our accounts. Cars can only be depreciated at 6% / year but vans at 18%, my accountant thinks it would be classed as a van (ours is a 2019 PVC professional conversion) but suggests going half way (put it through the books at 12%), but I've read that HMRC may classify them as cars .... I'm struggling to find a definite answer!

Has anyone put them through their books or advise what they have done please?

Put it through at what ever you want, depreciation is writing the asset off over the its useful life. For tax purposes you need to claim capital allowances. Your accountant should be advising you on that.

 

[2657]

Whatever depreciation is applied during its life will be balanced when sold

 

[Mad dog]

Link here says it's classed as a car:

Claim capital allowances

Claim capital allowances so your business pays less tax when you buy assets - equipment, fixtures, business cars, plant and machinery, annual investment allowance, first-year allowances.

www.gov.uk

Yes, that's what I saw - are capital allowances the same as depreciating ...? (I do most of my accounting myself, my accountant checks it over at the yr end - I'm just trying to do his home work for him, otherwise he'll have to call HMRC [who's advice isn't always to be relied upon]!

 

[Mad dog]

When was the last time a car only depreciated by 6% /year ? Has it even ever happened ?

Current deprecation is now only 6% I believe for 'polluting cars'!

 

[2x2camper]

Current deprecation is now only 6% I believe for 'polluting cars'!

Deprecation is at a rate decided by the business over what it expects the assets to be useful to it. If the asset is worn out after 2 years you would depreciate it over 2 years. Deprecation is ignored by HMRC and replaced by capital allowances. If you accountant doesn't know that then sack him/her.

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[Mad dog]

Deprecation is at a rate decided by the business over what it expects the assets to be useful to it. If the asset is worn out after 2 years you would depreciate it over 2 years. Deprecation is ignored by HMRC and replaced by capital allowances. If you accountant doesn't know that then sack him/her.

I'm no expert, call it capital allowances or capital depreciation ... HMRC's site says

Special rate pool
You have to claim a lower rate of 6% on:

• parts of a building considered integral - known as ‘integral features’
• items with a long life
• thermal insulation of buildings
• cars with CO2 emissions over a certain threshold - check the threshold for your car, which depends on the car and when you bought it

I assumed from this that if the moho is classed as a car in the tax man's eyes, then I can only write it off at 6%...?

 

[Happy1]

238-520 Definition of ‘car’ | Croner-i Tax and Accounting

Statutory definition The capital-allowance definition of ‘car’ is given at CAA 2001, s. 268A. The term covers any ‘mechanically propelled road vehicle’ except: •a motorcycle;

library.croneri.co.uk

Don’t bother reading it’s too complicated! Definitely an email to HMRC to ask the question.

 

[phillipsheila]

I would of read but they want me to subscribe

 

[Bustup15]

Would expect your accountant to be able to get a definitive answer from HMRC all they need to do is ask them?

Sorry but I had to
Has anyone ever had a black and white response from HMRC?

 

[TheCaller]

I would say that if it was converted before it was first registered, then HMRC wouldn't view it as a van designed to carry goods, so it falls back to being a car.

Also bear in mind that whatever rate of Capital Allowance you claim, you then have to apportion it between business & private use, so you will need to keep full mileage & usage records to justify the proportion that you do claim through the business.

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[projectdogman]

The rate of depreciation used in your accounts should reflect the useful life of the asset and is not necessarily representative of the allowed deduction for tax purposes. If you expect it's life to be five years, then 20% per annum would be the annual charge to your accounts. Similarly, a period of eight years would reflect a rate of 12.5% per annum. Your accountant will prepare a Tax Computation where the profit figure in your accounts is adjusted for depreciation charged, profit/loss on asset disposals and any percentage of private use of motor expenses, etc. This is your taxable income, and from this, you can deduct capital allowances at the statutory rate. But you also need to take into account private usage when calculating capital allowances - if private usage of an asset is 50%, then you can only claim the same proportion as a deduction against income. As said above, your accountant should be aware of the relevant rates for any capital allowances you are entitled to.