Dep on Motor Vehicle

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In the UK, motor vehicle depreciation rates are influenced by factors like vehicle type, expected lifespan, and residual value. For tax purposes, capital allowances are used, with rates varying based on CO2 emissions and purchase date. For example, vehicles with very low emissions may qualify for a 100% first-year allowance, while others fall into main or special rate pools with annual allowances of 18% or 6% respectively.

Mahesh Jadhav

Mahesh Jadhav (Querist)
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08 May 2023 Hello,

Can you tell me what is depreciation rate should be accounted for Motor Vehicle in United Kingdom ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 May 2023 Motor vehicles — expense around 25% of the overall value a year, with a full write-off over 4 years.

CA Syed Raza Abbas Rizvi

CA Syed Raza Abbas Rizvi (Expert)
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16 May 2023 In the United Kingdom, the depreciation rate for a motor vehicle depends on several factors, including the type of vehicle, its expected useful life, and its residual value.

For tax purposes, the UK government provides guidelines on the depreciation rates that can be used. These guidelines are often referred to as "capital allowances." The rates can vary based on factors such as the vehicle's CO2 emissions, its type (cars, vans, etc.), and the date of purchase.

As of my knowledge when I was in UK last year, the UK capital allowance rates for cars were as follows:

Vehicles with CO2 emissions of 50g/km or less: 100% first-year allowance.
Vehicles with CO2 emissions between 51g/km and 110g/km: Main rate pool allowance of 18% per year.
Vehicles with CO2 emissions over 110g/km: Special rate pool allowance of 6% per year.

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