BrianSFC

This year our company van was written-off due to flooding. The insurance company settled the claim at £9k which is £3k lower than the net book balance sheet value of the van. HMRC Business Income Manual section BIM40755 suggests that the insurance proceeds should be treated as a Capital Receipt, ie. posted against the asset, resulting in a loss to the P&L of £3k in our case. However, I have had conflicting advice which suggests the insurance proceeds should be regarded as income, reduced by the £3k net loss. I would like to know the correct way to deal with this so I have the correct Corporation Tax computation. Thanks.