Self Employed, need an estate car, what can I claim back?
Discussion
Hi all.
After running vans for the last 10yrs I’m at the stage where I can get away with an estate car instead as I only need to transport me & some tools. And combine family car/work car.
The question is, what can I claim back on my SA? The car would be financed & fuelled through the books.
I’ve always claimed pretty much everything back from the vans but have no idea how it would work for a car.
My accountant is a bit vague so thought I’d ask on here.
Cheers
Jamie
After running vans for the last 10yrs I’m at the stage where I can get away with an estate car instead as I only need to transport me & some tools. And combine family car/work car.
The question is, what can I claim back on my SA? The car would be financed & fuelled through the books.
I’ve always claimed pretty much everything back from the vans but have no idea how it would work for a car.
My accountant is a bit vague so thought I’d ask on here.
Cheers
Jamie
An estate car is a motor car, so will have the same restricted Capital Allowances that go with motor cars.
Vans are not motor cars, they are Commercial Vehicles and therefore are eligible for the much more generous capital allowances that go with "Plant an Machinery".
As far as running costs are concerned, the claims are the same for a van as for a car. The main aspect in regards to sole traders is ensuring that the expense claims are those expenses incurred wholly and exclusively for the purpose of the trade. In other words, no claims are allowed for non-business use.
Vans are not motor cars, they are Commercial Vehicles and therefore are eligible for the much more generous capital allowances that go with "Plant an Machinery".
As far as running costs are concerned, the claims are the same for a van as for a car. The main aspect in regards to sole traders is ensuring that the expense claims are those expenses incurred wholly and exclusively for the purpose of the trade. In other words, no claims are allowed for non-business use.
Eric Mc said:
An estate car is a motor car, so will have the same restricted Capital Allowances that go with motor cars.
Vans are not motor cars, they are Commercial Vehicles and therefore are eligible for the much more generous capital allowances that go with "Plant an Machinery".
My taxis are classed as commercial vehicles for tax purposes, because they do no private mileage at all.Vans are not motor cars, they are Commercial Vehicles and therefore are eligible for the much more generous capital allowances that go with "Plant an Machinery".
Tyre Smoke said:
Eric Mc said:
An estate car is a motor car, so will have the same restricted Capital Allowances that go with motor cars.
Vans are not motor cars, they are Commercial Vehicles and therefore are eligible for the much more generous capital allowances that go with "Plant an Machinery".
My taxis are classed as commercial vehicles for tax purposes, because they do no private mileage at all.Vans are not motor cars, they are Commercial Vehicles and therefore are eligible for the much more generous capital allowances that go with "Plant an Machinery".
Marneus said:
Hi all.
After running vans for the last 10yrs I’m at the stage where I can get away with an estate car instead as I only need to transport me & some tools. And combine family car/work car.
The question is, what can I claim back on my SA? The car would be financed & fuelled through the books.
I’ve always claimed pretty much everything back from the vans but have no idea how it would work for a car.
My accountant is a bit vague so thought I’d ask on here.
Cheers
Jamie
You need to keep accurate mileage records (down to the day) & then calculate the percentage of business use per year. You can then claim back this percentage of the running costs. The purchase cost depreciation is a matter for advcie from your accountant. After running vans for the last 10yrs I’m at the stage where I can get away with an estate car instead as I only need to transport me & some tools. And combine family car/work car.
The question is, what can I claim back on my SA? The car would be financed & fuelled through the books.
I’ve always claimed pretty much everything back from the vans but have no idea how it would work for a car.
My accountant is a bit vague so thought I’d ask on here.
Cheers
Jamie
FredClogs said:
I believe, and may be wrong, but in almost all scenarios, when it comes to cars (unless it's a taxi or a zero emmisions related thing) you're better to buy the car yourself and claim mileage back from your company and Vat on the fuel if you're vat registered.
This^claim back business related mileage @45p for the first 10k miles.
Eric Mc said:
If you have a business where a van is the best type of vehicle to have, get a van. The tax reliefs on vans are way better than with a car.
I’ll probably end up doing this, I was just thinking about the cost of decent vans vs the cost of decent estate cars. My brother has just bought a Transit at £27k +VAT
Writing down allowance on a low emissions car is 18% of the purchase price.
Does this mean 18% of the original purchase price every year, or is the figure reduced by 18% each year?
Example. Sole trader buys low emissions car for £10k using cash from savings.
First year write down allowance is £1800.
Is the second year allowance £1800 or £1476?
The car is sold after 5 years for £3000. Is this money taxed as income, bearing in mind that it was purchased with savings from taxed income?
Does this mean 18% of the original purchase price every year, or is the figure reduced by 18% each year?
Example. Sole trader buys low emissions car for £10k using cash from savings.
First year write down allowance is £1800.
Is the second year allowance £1800 or £1476?
The car is sold after 5 years for £3000. Is this money taxed as income, bearing in mind that it was purchased with savings from taxed income?
clockworks said:
Writing down allowance on a low emissions car is 18% of the purchase price.
Does this mean 18% of the original purchase price every year, or is the figure reduced by 18% each year?
Example. Sole trader buys low emissions car for £10k using cash from savings.
First year write down allowance is £1800.
Is the second year allowance £1800 or £1476?
The car is sold after 5 years for £3000. Is this money taxed as income, bearing in mind that it was purchased with savings from taxed income?
It's 18% of the reduced amount each year - so the allowance gets less as the years move on. If the proceeds on disposal exceeds the reduced value as per the capital allowances calculations, you will be taxed on the surplus. This is known as a "balancing charge". Conversely, if the disposal proceeds are less, then you get a "balancing allowance".Does this mean 18% of the original purchase price every year, or is the figure reduced by 18% each year?
Example. Sole trader buys low emissions car for £10k using cash from savings.
First year write down allowance is £1800.
Is the second year allowance £1800 or £1476?
The car is sold after 5 years for £3000. Is this money taxed as income, bearing in mind that it was purchased with savings from taxed income?
"Disposal proceeds" can mean a number of things. It can be the simple sale price or it could be the trade in value received (or a bit of both). It can also be market value if the vehicle is simply removed from the business without being sold - such as when the business ceases.
Eric Mc said:
It's 18% of the reduced amount each year - so the allowance gets less as the years move on. If the proceeds on disposal exceeds the reduced value as per the capital allowances calculations, you will be taxed on the surplus. This is known as a "balancing charge". Conversely, if the disposal proceeds are less, then you get a "balancing allowance".
"Disposal proceeds" can mean a number of things. It can be the simple sale price or it could be the trade in value received (or a bit of both). It can also be market value if the vehicle is simply removed from the business without being sold - such as when the business ceases.
Thanks for the info. The way I read that, taken over the "lifetime" that the vehicle is owned by the business, you only get tax relief on the difference between the purchase and sale price. This makes sense (apart from losing any interest that would have been earned on the savings if one hadn't purchased the vehicle)."Disposal proceeds" can mean a number of things. It can be the simple sale price or it could be the trade in value received (or a bit of both). It can also be market value if the vehicle is simply removed from the business without being sold - such as when the business ceases.
So the only real difference is that you get the allowance "up front" with a van, but it's spread over time with a car?
Does leasing have any benefits over purchasing outright, assuming that the business has the cash to make the purchase without borrowing?
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