Private car for business use - changing car

mickdw

Ok, well for a number of years, ive been using my private car for business and allowing a portion of the costs against tax. I now want to change cars and am wondering what the situation will be.

Some details:
Car bought new in 08 prior to the introduction of co2 rules. Car was over 50k new but 24k max can be claimed over 8 years - 3k per year depreciation allowable. Ive only been claiming 30% business use so 900 per year tax saving due to capital cost of the car.
So can someone give me a rough calculation of how changing car would be handled tax wise in this case. say the car sells for 13k now having claimed 7 years depreciation on it. I believe there is a balancing calculation and I might owe money to revenue on disposal of it.

Alan Shore

€13,000 x 24k/50k = €6,240 is the value for disposal.

Compare this with the Tax Written Down Value say €3,000 (€24,000 - €24,000 x 12.5% x 7 years)

€6,240 - €3,000 = €3,240 x 30% = €972 so you would have a clawback of €972.

So in the year of disposal you would reduce the capital allowances for the year by €972.

mickdw

Alan Shore wrote: »

€13,000 x 24k/50k = €6,240 is the value for disposal.

Compare this with the Tax Written Down Value say €3,000 (€24,000 - €24,000 x 12.5% x 7 years)

€6,240 - €3,000 = €3,240 x 30% = €972 so you would have a clawback of €972.

So in the year of disposal you would reduce the capital allowances for the year by €972.

Thanks alot.
That's a comprehensive answer.