ACCA Applied Skills · Taxation (UK) · Property and investment income
Gwen is a sole trader landlord who runs a UK property business and prepares accounts to 5 April. In the year to 5 April 2026 she bought a van for use in the business for £22,000. The van is used only for business and is not a car. She has made no other purchases of plant. She claims the annual investment allowance (AIA). What capital allowance does she obtain for the van for 2025/26?
Gwen obtains £22,000. A van is plant and machinery, not a car, so it qualifies for the annual investment allowance at 100% up to the £1,000,000 limit. The whole cost is relieved in the year, rather than the 18% main pool writing down allowance.
- A£22,000Correct
- B£3,960
- C£1,320
- D£11,000
Explanation
Expenditure on a van is plant and machinery qualifying for the AIA. The AIA is 100% up to a £1,000,000 limit, so the full £22,000 is relieved. £3,960 is the 18% main pool writing down allowance, which is wrong because the AIA is available and used.
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