Self-employed allowable expenses (again!)

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    craigb
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    I’d appreciate your advice:

    The customer is a self-employed window cleaner, and has supplied his accounts for last year of trading, on request, and has advised that his business van was stolen during that time.

    The van was owned outright, and whilst insured the customer states he only received several hundred pounds after excess from the insurance company. For a two month period immediately after the van was stolen the window cleaner used the family’s existing car for business purposes, this car was on credit and the claimant has declared the whole of the loan and capital repayments as a business expense.

    After this time the family traded in the car and purchased a smaller car, again on credit, because it was more economical and would be cheaper (and the loan agreement provided confirms this). Again both interest and capital repayments have been included as a business expense along with the usual vehicle running costs. The vehicle is the only one that the family possess and have stated that it is used for business all time (during business hours). I’m happy to accept that the majority of the costs incurred for the vehicles were for business use, and the customer appears to have declared a realistic income for the period in question.

    [i:97afcfd1a8]Would you allow the capital repayments and loan interest, just the loan interest or neither (and for which car)?[/i:97afcfd1a8]

    I don’t personally think that either charge can really be classed as repairing or replacing a business asset, but I’d like some other opinions. (Would the fact that he already owned the first car before the van was stolen matter?)

    Craig.

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