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INCOME TAX AND NEW VEHICLES A CLIENT has recently handed

23rd April 1948, Page 43
23rd April 1948
Page 43
Page 43, 23rd April 1948 — INCOME TAX AND NEW VEHICLES A CLIENT has recently handed
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Which of the following most accurately describes the problem?

to us a copy of "The .1-1 Commercial Motor" dated March 12, 1948, and we have read with much interest the article by S.T.R. concerning the Income Tax problem arising from the purchase of new vehicles. The coach owner who raised the query should be very grateful for the comprehensive manner in which you have dealt with his problem.

It may perhaps be of .interest to make.two observa

tions. First, so long as the operator is purchasing for replacement his immediate tax benefit would be greater if he evoked Section 18 of the Income Tax Act, 1945, whereby the amount of the balancing charge is deducted from the cost of the new coach for the purpose of the initial and annual allowance, and no balancing charge is made. Secondly, with a view to bringing his tax benefit nearer, the owner would, perhaps, be well advised to consult his accountant as to the advisability of converting his business into a limited company or alternating his accounting date.

The former course would involve a recertification of the vehicles and so far as a change of the accounting date is concerned, it should be bomegin mind that the Inland Revenue Authorities have certain options.

Grimsby. G. R. SMITH,

Chartered Accountant. (For R. N. Store and Co.)

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