Dispoal proceeds received from TFL for VAN

Hi : new one for me : Have a london based client sole trader, just received from TFL a £7,000 grant for scrapping van that was non-ulez complient. question : do I include the 7k as the disposal value for capital allowances purposes ? I know for vat the 7k is not relevant thanks

Hi,

Effectively any such grant, with a few exceptions, reduces the qualifying expenditure accordingly. This normally relates to grants received on the purchase of an asset or shortly after, although there is not any specific time limit for receiving the grant that relates to this. The grant is not towards the purchase cost however, it is to scrap the asset and so we think the more relevant instruction here would be at CA23240 which covers disposal events and more specifically CA23250 that gives a list of what disposal amounts need to be brought into account.

CA23240 - PMA: WDA & balancing adjustments: Disposal events

CA23250 - PMA: WDA & balancing adjustments: Disposal values

For 'demolition or destruction' of the asset it says 'net amount received for the asset together with any insurance money received for the demolition or destruction and any other capital compensation. This would seem to cover any payment made for scrappage and so it should be brought in as the disposal value, assuming that was all that was received, in respect of the asset.

Thank you.

Hello HMRC Admin, TFL Scrappage scheme grant can be treated as taxable or non-taxable income for corporation tax purposes. Does it have a specific place in CT600?

Hi,
You will need to speak with the provider and ask if it is counted as income or is tax exempt.
If it is taxable, it will either be included in your trading profit or your non-trading profit, depending on how it is to be treated. There is not a specific box just for grant income.
Thank you.