HMRC Electric Car company relief question

Stinky · 27 Nov 2024 at 19:58

I’ve goggled but can’t find a clear answer, and am waiting for my accountant to answer, but thought I’d ask here (and will not take any answers as gospel until my own accountant confirms)

But… I bought a Tesla back in 2020 which was allowable to claim back again my corporation tax, now that labour have extended this incentive, if I upgraded to a new Tesla can I get the same relief again on the new one? Or is it a one time only offer.

Does anyone know? I can’t find anything on HMRC site saying it’s limited to only one.

Diddums · 27 Nov 2024 at 20:07

Sounds like you need to speak to your accountant.

Stinky · 28 Nov 2024 at 06:27

Diddums said:
Sounds like you need to speak to your accountant.

Exactly what I have done but am waiting on a reply as mentioned above. But had hoped someone might have some useful input whilst I’m waiting for the reply

lee1101 · 28 Nov 2024 at 06:49

Yes you can get relief again against the new one. However, you need to consider the balancing charge for capital allowances.

When you upgrade, the amount that you receive for you current car will be added to your profits (assuming that you claimed 100% capital allowances when you purchased it) Net effect is that you get tax relief on the difference between price of the new car and what you receive for your old one.

Eg, new one is £50k. Tesla give you £20k for your current one through px. You’ll end up getting tax relief on £30k. (£20k balancing charge, £50k capital allowance)

This only applies if you purchase (HP or PCP or cash) if you lease (PCH) you’ll just get relief on the actual lease payments paid.

Stinky · 28 Nov 2024 at 08:54

lee1101 said:
Yes you can get relief again against the new one. However, you need to consider the balancing charge for capital allowances.

When you upgrade, the amount that you receive for you current car will be added to your profits (assuming that you claimed 100% capital allowances when you purchased it) Net effect is that you get tax relief on the difference between price of the new car and what you receive for your old one.

Eg, new one is £50k. Tesla give you £20k for your current one through px. You’ll end up getting tax relief on £30k. (£20k balancing charge, £50k capital allowance)

This only applies if you purchase (HP or PCP or cash) if you lease (PCH) you’ll just get relief on the actual lease payments paid.

Thank you! That makes sense