CAPITAL ALLOWANCE

Olive is self-employed, preparing her accounts to 5 April each year. She claims capital
allowances on a motor car used in her business. The motor car has a CO2 emission rate of
145 grams per kilometre, with 40% of Olive’s mileage for private purposes. The motor car
had a tax written down value of £12,000 at 6 April 2020. Olive sold the motor car for
£6,000 on 1 November 2020.

THE ANSWER IN THE TEXT £(12,000 – 6,000) ? 60% = £3,600

DOUBTS – 1) The car is being disposed resulting in a capital allowance but the car Is being
disposed at 1st November 7 months after the start of the tax year so shouldn’t
we charge the 6% allowance for 7/12 months and write down the value of the
car and then calculate allowance

2) why is the 12000*0.06*7/12*0.60 allowance not provided?