If I am self employed, and I got a car, and the car is 80% used for business, and the CO2 is 150g/km, cost me £8,000. and I know the depreciation is £600 per year. Now I just want to know how do I treat this depreciation? I think its not allowable expense, but do I include the depreciation in the capital allowance? or just totally ignore the depreciation when doing the self-assessment tax return?
The depreciation is only used for Profit & Loss account & Balance sheet purposes so its shows in the profit & loss but when you calculate the taxable profit, depreciation is added back onto the profit for tax purposes therefore you disallow it.
For tax purposes you need to do the capital allowances on the vehicle to reduce the taxable profit.