CHAPTER 5 : CAPITAL ALLOWANCES

PARY A : MULTICHOICE/MULTI-PART MULTICHOICE QUESTION

Answer the following questions.
1. David began trading on 1 May 2019. On that date he brought a car into the business
(business use only) valued at £10,000. The car has CO2 emissions of 108 g/km
David made up his first accounts to 31 December 2019.
What is the maximum capital allowance that David can claim for the period to 31
December 2019?
A £1,200
B £1,800
C £6,667
D £10,000
2. Terry has been trading for many years making up accounts to 31 March each year.
He has however decided to change his accounting date to 31 December and makes up
accounts for the nine months to 31 December 2019.
At 1 April 2019, the tax written down value of his main pool was £8,000.
On 12 July 2019, Terry bought a van for use in the business costing £16,000.
What are the maximum capital allowances that Terry can claim for the nine-month
period to 31 December 2019?
A £3,240
B £4,320
C £17,440
D £17,080
3. Marcus has been trading for many years, making up accounts to 5 April.
The tax written down value of the main pool was £900 at 6 April 2019.
The only other asset in the business for capital allowances purposes was a car bought
in 2017, which Marcus uses 75% for business purposes. The tax written down value of
the car at 6 April 2019 was £7,000.
On 1 September 2019 Marcus sold the car for £7,800. The original cost was £10,410.
What are the maximum capital allowances available to Marcus for the year ended
5 April 2020?
A £1,700
B £(638)
C £(438)
D £300
4. Sergio bought a new car at a cost of £14,000 on 7 October 2019. The CO2 emissions
of the car are 47 g/km.
What capital allowances can he claim in respect of the car for the year ended 31 March
2020?
A £0
B £1,260
C £2,520
D £14,000
5. Nadia started trading on 1 January 2019. On 1 November 2019 she bought a single
item of machinery for £1,014,000.
What is the maximum capital allowance Nadia can claim for the year ended 31
December 2019?
A £38,520
B £1,014,000
C £1,000,000
D £1,002,520

PART B: SCENARIO-BASED QUESTION

Question 1:
Jacob has been trading for many years, making up accounts to 31 December.
Jacob had tax written down values at 1 January 2019 of:
Main pool £11,800
Car (purchased 2014 with CO2 emissions of 105 g/km - 40% private £14,000
use by Jacob)
On 15 May 2019 Jacob purchased a car for 50% business, 50% private use by
an employee, with CO2 emissions of 109 g/km at a cost of £7,600.
On 22 September 2019 Jacob spent £1,500 on a zero-emission goods vehicle.
Requirement: What are the maximum capital allowances that Jacob can claim
for the year to 31 December 2019?

Question 2:
Glen prepares accounts to 31 March. At 1 April 2019, the TWDV of the main pool was
£48,100.
Transactions during the year ended 31 March 2020 were:
10.5.19 Purchased plant for £1,003,300
25.6.19 Purchased two new cars, one with CO2 emissions of 104 g/km for £18,600 and
one with CO2 emissions of 47 g/km for £13,000
18.1.20 Sold plant for £4,600 (originally purchased for £9,500)
Requirement: Calculate the capital allowances for the year ended 31 March 2020.

Question 3:
Georgina runs a small business and prepares accounts to 31 March. At 1 April 2019,
the TWDV in the main pool was £21,200. The following transactions took place during
the y/e 31 March 2019:
10.5.19 Purchased plant for £6,600
25.6.19 Purchased a motor car with CO2 emissions of 101 g/km for £17,000
15.2.20 Sold some machinery for £9,400 (originally purchased for £12,000)
16.2.20 Purchased a motor car with CO2 emissions of 102 g/km for £10,600 (used 40%
for private purposes by Georgina)
14.3.20 Purchased a new motor car with CO2 emissions of 42 g/km for £11,750
Requirement: Calculate the capital allowances for the year ended 31 March 2020.
Question 4:
Angelina is in business as a sole trader and prepares accounts to 31 May each year.
During the year ending 31 May 2020 she purchased the following:
15 June 2019 Purchased new office furniture for £98,800.
2 July 2019 Purchased a new car (with CO2 emissions of 154 g/km) for £12,600 which
Angelina will use 20% of the time for private purposes.
10 July 2019 Installed a new water heating system in her business premises at a cost of
£40,000 and a new lighting system at a cost of £70,000.
In addition on 1 July 2019 she sold office equipment for £18,700 (original cost
£28,000).
As at 1 June 2019 the TWDV on her main pool was £10,800, and on the special rate
pool was £16,600.
Requirement: Calculate Angelina’s capital allowances for the y/e 31 May 2020.

Question 5:
Wolfgang commences to trade on 1 January 2019 and draws up accounts to 31
December each year. During his first year to 31 December 2019, he incurs the
following expenditure:
6.4.19 Machinery £1,012,000
6.7.19 New car with emissions of 43 g/km £8,000
31.10.19 New car with emissions of 105 g/km £10,500
Requirement
Compute the maximum capital allowances available to Wolfgang for the year ended
31 December 2019.

Question 6:
Jolene started trading on 1 July 2019. Her first set of accounts were made up to 31
March 2020.
On 1 December 2019, Jolene purchased a car with CO2 emissions of 105 g/km for
£21,000 which she uses 70% for business purposes.
Requirement
Compute the maximum capital allowance for Jolene for the period ended 31 March
2020.

Question 7:
Mike runs a business and prepares his accounts to 5 April. As at 6 April 2019, the
TWDV in the main pool was £11,700. The following transactions took place in the
year ended 5 April 2020:
• Purchased plant for £1,018,500
• Purchased a motor car with CO2 emissions of 105 g/km for £19,000
• Sold some machinery for £8,500 (originally purchased for £18,000)
• Purchased a motor car with CO2 emissions of 103 g/km for £9,400 (used 45% for
private purposes by George)
Requirement: Calculate the capital allowances for the year ended 5 April 2020.