Self employed car advice please help.
Discussion
You'll not get a business lease without a year or three accounts to prove you can afford it.
You can't expense a personal PCP.
Just claim business miles at 45 pence for the first 10,000 and 25 pence after. This can't include commuting to your regular place of work or personal mileage.
That's probably the most tax efficient way to do it.
When you are eligible for a business lease then BIK becomes a factor and can be crippling depending on what you decide to drive.
You can't expense a personal PCP.
Just claim business miles at 45 pence for the first 10,000 and 25 pence after. This can't include commuting to your regular place of work or personal mileage.
That's probably the most tax efficient way to do it.
When you are eligible for a business lease then BIK becomes a factor and can be crippling depending on what you decide to drive.
Super Slo Mo said:
Just claim business miles at 45 pence for the first 10,000 and 25 pence after. This can't include commuting to your regular place of work or personal mileage.
AGREED - this is often the simplest method for smaller sole traders
When you are eligible for a business lease then BIK becomes a factor and can be crippling depending on what you decide to drive.
BIK (Benefit in Kind) - this only applies if the OP is trading through a limited company and is an employee or director of the company. BIKs do not apply to sole traders
AS per the other similar threads that have suddenly cropped up - think carefully about getting a low emission vehicle or a commercial vehicle. Tax reliefs will be better.AGREED - this is often the simplest method for smaller sole traders
When you are eligible for a business lease then BIK becomes a factor and can be crippling depending on what you decide to drive.
BIK (Benefit in Kind) - this only applies if the OP is trading through a limited company and is an employee or director of the company. BIKs do not apply to sole traders
Super Slo Mo said:
Ah, ok. I've not been a sole trader for many years so didn't know that.
The only snag with commercials is the driver's hours rules which VOSA seem to be clamping down on, even for smallish vans.
BIKs are all about the PAYE system. Sole traders are not taxed under PAYE.The only snag with commercials is the driver's hours rules which VOSA seem to be clamping down on, even for smallish vans.
In what way are VOSA "clamping down" on commercial vehicles - and if they are, in what way does it affect the Income Tax (and National Insurance) aspect of motor cars/commercial vehicles (which is what the OP was enquiring about)?
Generally, a vehicle classified as a Commercial Vehicle (vans, trucks, pickups etc) are eligible for the generous Capital Allowances available for what HMRC calls "Plant and Machinery". These Capital Allowances can be as high as 100%.
A Motor Car will normally be eligible for maximum Capital Allowances of 18% - with the exception of Low Emission or Electric Cars which can also attract up to 100% allowances.
Be aware that HMRC have already started tightening the definitions as to what a "low emission" Motor Car actually is so fewer classes of car now qualify.
It doesn't affect anything regarding tax, I was just adding a caveat, as the domestic driver's hours rules are another thorn in the side that add hassle and complexity.
They're not new rules, but I'm informed that VOSA have started clamping down on them, whereas up until now they've tended to turn a blind eye to van drivers (i.e. under 3.5 tonnes).
So while you save tax by having one, by being restricted to daily driving and duty hours (potentially 11 hours max duty) it can seriously curtail your productivity. Depending on how or how much you're charging, it might end up costing more, in hotels and nights out due to duty limits, than you save in tax. Just as an example, of course, as it all depends on how many hours an individual does in a day.
For me, a commercial is a non-starter, as a relatively normal duty day is 12 hours.
They're not new rules, but I'm informed that VOSA have started clamping down on them, whereas up until now they've tended to turn a blind eye to van drivers (i.e. under 3.5 tonnes).
So while you save tax by having one, by being restricted to daily driving and duty hours (potentially 11 hours max duty) it can seriously curtail your productivity. Depending on how or how much you're charging, it might end up costing more, in hotels and nights out due to duty limits, than you save in tax. Just as an example, of course, as it all depends on how many hours an individual does in a day.
For me, a commercial is a non-starter, as a relatively normal duty day is 12 hours.
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