Tax and a new car / old car
Discussion
Hello,
Some help on this please.
I am trying to convince a mate to get rid of the third car, but I may be wrong.
This is the situation, he is employed in the NHS as a PAYE employee, however like a lot of NHS employees he earns extra income by using his skills externally and puts this income on his annual tax return.
He has bought a hybrid (I know..hee hee) brand new and will offset the cost of the car as tax deductable by whatever the current annual percentage rate rebate allows off the initial £30k outlay.
However he wants to keep his old car so that HMRC can see that his personal mileage is done on this second car.
The old car is worth about £2k and it will probably just sit in the garage and die.
I think that he can use his new car for personal use but still get business mileage and the annual tax allowance off the purchase price offset against his tax bill. Therefore he has no reason to keep the old car. Please correct me if I am wrong.
There is a third car in the household for his wife to use.
Any expert advice out there will be gratefully received.
I hope that you can see what I am trying to say here
Some help on this please.
I am trying to convince a mate to get rid of the third car, but I may be wrong.
This is the situation, he is employed in the NHS as a PAYE employee, however like a lot of NHS employees he earns extra income by using his skills externally and puts this income on his annual tax return.
He has bought a hybrid (I know..hee hee) brand new and will offset the cost of the car as tax deductable by whatever the current annual percentage rate rebate allows off the initial £30k outlay.
However he wants to keep his old car so that HMRC can see that his personal mileage is done on this second car.
The old car is worth about £2k and it will probably just sit in the garage and die.
I think that he can use his new car for personal use but still get business mileage and the annual tax allowance off the purchase price offset against his tax bill. Therefore he has no reason to keep the old car. Please correct me if I am wrong.
There is a third car in the household for his wife to use.
Any expert advice out there will be gratefully received.
I hope that you can see what I am trying to say here
I don't know quite how he has set up his 'extra income' so cannot be sure if benefit in kind would apply but I guess he thinks it will as he is trying to mitigate it so would only add this. I believe HMRC don't care if private use is actually undertaken in a company car only if it available for use.
If it is genuine self employment (i.e. not contracting through a limited company) then there are no Benefit in Kind issues with ANY car he chooses to use as his "business" car.
What he has to be concerned with are -
a) splitting the running costs of the car between business use and private use
b) deciding what the appropriate Capital Allowance claims are available for the vehicle he has allocated to the business. If the vehicle is an HMRC environmentally friendly vehicle it may be eligible for some very good capital allowances.
What he has to be concerned with are -
a) splitting the running costs of the car between business use and private use
b) deciding what the appropriate Capital Allowance claims are available for the vehicle he has allocated to the business. If the vehicle is an HMRC environmentally friendly vehicle it may be eligible for some very good capital allowances.
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