treatment of tax on £5000 ULEZ scrappage scheme

I act as agent for my son who is a self employed gardener. His old van has a depreciated book value of £2250 which he has had to scrap as it is too old to be exempt from the £12.50 charge. He is buying a replacement van which will cost £17000. How is the £5000 scrappage allowance treated for tax purposes regarding the book value of the scrapped van and depreciation on the new van.This will increase the depreciation for the year ended 5 April 2023 from £563 to £6500 if 25% depreciation is applied which is bound to be queried by the Inland Revenue unless an explanation is given when filling in the self assessment return for the year.

Hi,
 

There is no tax relief for this project.  The £5000 scrappage given for disposal of the asset, is set against the pool the van was held under, to reduce the balance.  Any sum remaining after balance reduced to £0.00, would then be added to the turnover as profit from the disposal of the van.  See link: Work out your writing down allowances     . Thank you.