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Hi,
On ex:2 of Chapt 5 from OT Notes, because of the 30% personal use of the car by Jane, we only put 70% of the allowance in the allowance column.
But at question 33 of Specimen Paper (Sept 2016), for Motor car [2], the asnwer says that they put the full allowance because the 50% private use is irrelevant as it will be assessed on the employee as a benefit.Could you please tell me what’s the difference between these 2 cases, and explain when we should consider the % of private use when computing capital allowance.
Thanks for all your help
Nlikha
Look at the note immediately preceding example 2 (section 7.1 note (d)) which tells you that private use by an employee of the proprietor has NO effect on the CA computation – the private use restriction ONLY applies to private use by the proprietor of the unincorporated trade. The note also tells you that the car would then be treated as an assessable benefit and tells you that is then dealt with in Chapter 9!!
Everything you have just quoted about Q.33 is INCLUDED in that note!!
Then look again at example 2 it ALSO includes the purchase of a car for use by an employee!!
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