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Posted Tue, 27 Jul 2021 14:26:34 GMT by Rebecca Webster
Van purchased with finance. In year 1, I was using cash basis so put through deposit and the finance payment (with the interest part of the finance payment capped at £500). If I move to accrual accounting in year 2, what can I put through for the van? Is it 18% capital allowance for the cost of the van minus what was claimed as an expense in year 1? (with the interest part of the loan repayment not capped)?
Posted Fri, 30 Jul 2021 11:25:14 GMT by HMRC Admin 19
Hi,

If you are changing from cash basis accounting to traditional accounting you will need to make some adjustments. Guidance on how to do this can be found in the following guidance, HS222 under the section "leaving the cash basis":

How to calculate your taxable profits (Self Assessment helpsheet HS222)

Thank you.
 

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