Vehicle Depreciation
Overheads & DepreciationThis records the annual depreciation charge specifically for Motor Vehicles. It normally carries a debit balance, matched by a credit to the accumulated depreciation account (code 0051).
Real-world examples
Delivery or logistics fleet
A delivery firm running ten vans, each costing £28,000 and depreciated straight-line over 5 years, faces a combined annual charge of £56,000 — one of the largest single costs in its accounts. The entry is a debit of £56,000 to 8003 (Vehicle Depreciation) and a credit of £56,000 to 0051 (accumulated depreciation, Motor Vehicles). Because vans are typically replaced on a rolling cycle, this figure tends to stay fairly consistent year to year rather than spiking.
Trades business with a couple of vans
A plumbing or electrical business running two vans worth £22,000 each, depreciated over 5 years, has a much smaller £8,800 annual charge — a debit of £8,800 to 8003 and a credit of £8,800 to 0051. Still meaningful relative to the size of the business, but a fraction of what a logistics fleet carries.
Office-based business
A business that doesn't operate any vehicles — most professional services and agencies — has nothing to post here at all; code 8003 exists in the chart of accounts but sits permanently at zero.
Commonly confused with
Because code 8002 (Furniture/Fitting Depreciation) sits right next to this one in Overheads & Depreciation, it's a common mis-posting target. Code 8003 is specifically for vehicle depreciation, while 8002 covers furniture/fitting depreciation — similar in nature, but keeping them separate is what makes the overheads & depreciation section of your management accounts meaningful rather than a single lumped total.
What a mis-posting here costs you
An error posting to Vehicle Depreciation won't change total overhead spend, but it will distort the overheads breakdown that's usually reviewed line by line each month to spot cost creep.