Section 94D | Expenditure on vehicles ^F1

(1)This section applies if, in calculating the profits of a trade of a person for a period—

(a)a deduction would otherwise be allowable for the period in respect of qualifying expenditure incurred in relation to a relevant vehicle (see subsection (2)), or

(b)a deduction would be so allowable in respect of such expenditure but for the fact it is capital expenditure.

(2)In this section “relevant vehicle” means a car, motor cycle or goods vehicle that—

(a)is used for the purposes of the trade, and

(b)is not an excluded vehicle (see section 94E).

(3)The person may make a deduction under this section for the period in respect of the qualifying expenditure.

(4)If a deduction for a period is made under this section—

(a)no other deduction is allowed (for that or any other period) in respect of the qualifying expenditure, and

(b)this section applies in relation to the relevant vehicle for every subsequent period for which the vehicle is used for the purposes of the trade.

(5)The amount of the deduction is the appropriate mileage amount in relation to the relevant vehicle for the period (see section 94F).

(6)In this section “qualifying expenditure”, in relation to a vehicle, means any expenditure incurred in respect of the acquisition, ownership, hire, leasing or use of the vehicle, other than incidental expenses incurred in connection with a particular journey.

(7)For provision preventing capital allowances from being claimed in respect of qualifying expenditure incurred in relation to a relevant vehicle, see section 38ZA of CAA 2001.