EV Corp Tax relief, if bough in 1 financial year and car delivered in the next FY

[AQAsh]

Hi,
I wanted to get advice, I have purchased a BMW i4 in April and my financial year is end of May, The car will not be delivered till Dec. The question is as I paid for the car upfront in April, so that it shows as a expense in my last financial year. The car will be delivered and registered in Dec. I am hoping that it will come off my last years Corp Tax balance rather than this year, as I have not been working since that time.
Can anyone kindly advice. I do have the option to cancel the car and seriously thinking of doing this.

[WTFH]

Hi,
I wanted to get advice, I have purchased a BMW i4 in April and my financial year is end of May, The car will not be delivered till Dec. The question is as I paid for the car upfront in April, so that it shows as a expense in my last financial year. The car will be delivered and registered in Dec. I am hoping that it will come off my last years Corp Tax balance rather than this year, as I have not been working since that time.
Can anyone kindly advice. I do have the option to cancel the car and seriously thinking of doing this.

Two questions:
1. What is the date on the invoice?
2. What has your accountant said?

[northernladuk]

Why are you not speaking to your accountant before dicking about with stuff like this? Buying cars without knowing exactly how it's handled by the company and then asking a bunch of contractors what to do is not taking your responsibilities as a director very seriously.

You say you've not been working since them. By choice or can't find a gig. Buying an expensive car and then being on the bench for 5 months doesn't sound great. I'm assuming besides the 50+k you spent on the car you've got a ton in the business bank so you are comfortable?

[BlasterBates]

This link might help:

https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca11800

The normal rule is that expenditure is incurred on the date on which the obligation to pay becomes unconditional.

Sounds to me like this is a grey area that only an experienced accountant will be able to advise on.

[Lance]

This link might help:

https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca11800



Sounds to me like this is a grey area that only an experienced accountant will be able to advise on.

that's what I think.
However if the OP has simply paid a deposit (partial or in full) then it gets more complex. The car doesn't become an asset until it's delivered. So what to do with the cash up front? I guess it simply becomes a debtor account with the supplier until such point as the car is delivered. If there is a gap between obligation to pay and delivery, but no asset has been received I'm not sure what to do.

[Lance]

I'm assuming besides the 50+k you spent on the car you've got a ton in the business bank so you are comfortable?

I got £5 that says this a poor assumption. If OP was sitting pretty they wouldn't be considering canceling the car.

[WTFH]

This link might help:

https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca11800



Sounds to me like this is a grey area that only an experienced accountant will be able to advise on.

Hence my question about the invoice.
I suspect the "invoice" will be just a deposit - certainly for private purchases, anything before you sign the final paperwork is just a deposit. Until the vehicle is actually built and delivered, you've not bought it. When you finally pick the car up, then you get the invoice with the actual details on it (such as VIN, etc)

I'm also wondering if there's more to the story than described.

[WTFH]

I got £5 that says this a poor assumption. If OP was sitting pretty they wouldn't be considering canceling the car.

Or he's realised that if he winds up the company, the car is not automatically going to be his. It's a company asset which will have to be bought off the company at market value.

[northernladuk]

Or he's realised that if he winds up the company, the car is not automatically going to be his. It's a company asset which will have to be bought off the company at market value.

That's where my money is at.

[AQAsh]

First of all, thanks for the responses. Just to set the record straight,
1) No I am not winding the company up
2) I have a healthy bank Balance
3) I am not contracting as working on a separate Start-up and looking to close a round shortly. ( P.S) for the record not had issue with finding gig's so far thankfully.

The reason I wanted to know was simply which year does the corporation tax relief do I get as I will be beneficial.
The invoice date is in April and my end of year is end of May.