Leased Cars

Last modified 07:50, 24 Apr 2017

Overview

The software supports the calculation of the appropriate tax adjustments for leased car rental payments and does this for both pre April 2009 leases or post April 2009 leases.

These calculation are based on either the retail price or the CO2 emissions respectively.

  • For Expenses of Management of investments of the business, the allowable proportion of the rental payment is calculated and is incorporated into the management expenses summary

  • For Trades, the disallowable proportion of the rental payment is calculated and adjusted for in the adjusted trading results

The reference to lease cars includes Hire cars which are subject to the same restrictions.

Basic data entry requirements

In order for the software to calculate the correct adjustment for tax purposes, you need to provide a minimum set of relevant data using the data entry grids provided

From this minimum data entry, the relevant allowable proportion of the rental payment will be calculated.

Single Accounting periods

In a period of account which contains a single accounting period, the tax adjustment for the allowable proportion of the rental payments will be added to the Management Expenses.

If there is a trade present, then further adjustments may be required.

Multiple accounting periods

In a period of account comprising multiple accounting periods, the software will time-apportion the allowable adjustment and add it to the management expenses of the relevant accounting period.

If you do not wish to use the time-apportioned values, there are over-ride fields which allow this. These fields are only visible in a mutiple accounting period scenario.

Single Trades

When there is only one trade present within the company and it is the 'Primary trade', several adjustments will be made.

  • The allowable proportion of the rental income will be added to the Management Expenses of the period.
  • The trade will be adjusted for the Rentals per accounts amount as an additiont to the profit.

If the trade is not 'primary', the 'Per accounts' amount must be manually allocated the between the trade and expenses of management.

Multiple Trades

When there are multiple trades present within the company, you need to determine the allocation of the 'Rentals' value between the trades and the non-trading activity.

The default position is that the entire 'Rentals' value will be allocated against the Primary trade, but if there is no primary trade,  you need to manually allocate the disallowance between the trades and the non-trading activity.

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CCH Corporation Tax

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