Re: Residual value
"If the lorry is still worth £50 000 after 4 years, then maybe the tax relief should be on the £50 000 by which you would still be down after buying it and selling it?"
It is done that way, at least as far as that depreciation curve is known in advance.
You're right that there's a limit to how complicated there's any point making the system, and in fact that's roughly the approach the taxman takes _on this specific issue_. At the end of the day it doesn't make much difference at all whether something is depreciated in a way that exactly reflects the way the value changes over time, as long as the total depreciation is accounted for at some point - it's merely a cashflow issue (plus, as Tim noted, the value of that cash coming in sooner or later, which is pretty minimal in comparison).
Biting the hand that feeds IT
