Motor Vehicle expenses write off

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A user is seeking advice on how to write off £60,000 in motor vehicle maintenance expenses against the car's value for the 2023-24 financial year, as they use the vehicle rarely and are not claiming depreciation. The discussion clarifies that maintenance expenses should be expensed through the Profit & Loss account. If the expenses are personal, they should be debited to the proprietor's capital account, and depreciation is typically assumed to be provided. The user's proposed journal entry was incorrect as it incorrectly debited the P&L and credited the car and expenses, and the concept of a capital account for domestic accounts was also clarified.

Moosa Tamijuddin

Moosa Tamijuddin (Querist)
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23 April 2024 I am using Honda Amaze car very rarely at home or outside. Now the total maintenance expenses for the year 2023-24 have accumulated to Rs 60,000. How to write off this amount against the vehicle value? Because of minimum usage, I am not applying depreciation amount to my car.
Please advise.
Thanks and Regards.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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23 April 2024 you need to expense out the maintenance expenses ie debit the P&L. In case the expense is of personal nature, then debit appropriate amount to proprietor's capital account.

Depreciation is not for you to provide or not. It is assumed that the depreciation is provided.

Manish

Manish (Expert)
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23 April 2024 Do you use it for business?

Moosa Tamijuddin

Moosa Tamijuddin (Querist)
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23 April 2024 Thanks for your replies Gentlemen. I am using the car for personal use only. Now, since both the expenses and car value are Debits, shall I make a journal in the following method:
P & L account ....DR 1,20,000
Amaze Car............CR 60,000
Car Expenses........CR 60,000

Of course this will increase my P & L account ambiguously, but my purpose is solved. Please advise me. thanks and regards.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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23 April 2024 no. your purpose is not solved. what sort of entry is this?

if it is personal expense but you have included car in the assets and maintenances charges in expenses, then you need transfer both - the maintenance expense and depreciation to capital account.

Moosa Tamijuddin

Moosa Tamijuddin (Querist)
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23 April 2024 Mr.Nikhil, Thanks for your reply. Every year, in company accounts, depreciation @ 25% is accrued by debiting P&L A/c and Crediting Accruals account. At the end of 4th year, when the accrual is 100%, totally it is written off against the motor vehicle which makes it Zero value.
Mine is not a company account. This is a domestic account where I don't have any Capital account at all. Capital accounts are mainly for business enterprises. I wanted to make the entry based on the above discussion only. Otherwise no compulsion to do it so at all. Thanks again.

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