going self employed: lease or buy?
Discussion
Hi folks im going to the join the wonderful world of the self employed next month for the first time, it will be a commision only field sales position selling a very easy product and should have an income from week 1. Now im going to need an accountant ofcourse and a car to get about. What are the benefits of me buying a car as opposed to leasing it. My budget is 20k on an e46 m3 convertible but am so tempted to lease the new shape@ 650+vat per mnth. Now as far as my novice knowledge goes i can claim 40p per mile for up to 10,000miles pa and then 25p thereafter. I will easily be doing above 10k miles. If i lease the car what can i claim back? pros and cons please thankyou....
If you are doing a lot more than 10k per year a newish M3 convertable is going to eat a hell of a lot into your pocket in just the running costs.
Insurance for a group 20 car is harsh. Convertable is worse, and then for unlimited business use too, you will be stung. Servicing on that big boy is £700 or £400 at the dealer depending on whether is is an A or B service and the proper tyres are £140 each last time I got them.
If you are a travelling rep these are going to cost you a fortune. If you are self-employed you could have a month where you make zero income yet just your car costs may be £400 per month for two tanks of petrol per week, £250 per month insurance, and when you average out the servicing and consumables that is about another £100 at least per month. The repayments for that kind of money is going may be £400 to £500 per month. So all in all, you are looking at £1100 per month to run your motor. Then factor in the depreciation you are going to be caning off it by putting the miles on...!
My advice would be do get something cheapish and diesel that'll eat up the miles cheap. Leasing deals are two a penny and you get a brand new car with warranty. Then when you have an idea on how consistent the money you will be getting in you can decide whether you want to put an extra grand a month toward a flash motor!
Insurance for a group 20 car is harsh. Convertable is worse, and then for unlimited business use too, you will be stung. Servicing on that big boy is £700 or £400 at the dealer depending on whether is is an A or B service and the proper tyres are £140 each last time I got them.
If you are a travelling rep these are going to cost you a fortune. If you are self-employed you could have a month where you make zero income yet just your car costs may be £400 per month for two tanks of petrol per week, £250 per month insurance, and when you average out the servicing and consumables that is about another £100 at least per month. The repayments for that kind of money is going may be £400 to £500 per month. So all in all, you are looking at £1100 per month to run your motor. Then factor in the depreciation you are going to be caning off it by putting the miles on...!
My advice would be do get something cheapish and diesel that'll eat up the miles cheap. Leasing deals are two a penny and you get a brand new car with warranty. Then when you have an idea on how consistent the money you will be getting in you can decide whether you want to put an extra grand a month toward a flash motor!
Are you going to be a ltd company or operating as a sole trader as car taxation is treated very differently with each and will dictate whether you may want to run your car "within" the business or basically own it privately and charge your company for that usage (this is where the 40p and 10p things come in) - also are you going to be VAT registered (from day 1) as this might effect the viability of leasing.
touching cloth said:
Are you going to be a ltd company or operating as a sole trader as car taxation is treated very differently with each and will dictate whether you may want to run your car "within" the business or basically own it privately and charge your company for that usage (this is where the 40p and 10p things come in) - also are you going to be VAT registered (from day 1) as this might effect the viability of leasing.
no i wont be vat registered..to be honest i havent thought about being ltd was going to be a sole trader. is the later a better option i presume i will need a business bank account if im to be ltd?UpTheIron said:
alsheikh said:
Hi folks im going to the join the wonderful world of the self employed next month for the first time, it will be a commision only field sales position
Are you sure you are self employed? Sounds awfully like you are employed by a single employer to me...alsheikh said:
UpTheIron said:
alsheikh said:
Hi folks im going to the join the wonderful world of the self employed next month for the first time, it will be a commision only field sales position
Are you sure you are self employed? Sounds awfully like you are employed by a single employer to me...Whack in a huge mileage claim and the IR may look into it.
Sorry, but you are definitely NOT Self Employed.
You cannot work for one "employer" on any sort of basis (salaried or commission only) and just "claim" you are Self Employed.
The Revenue will tell you that being Self Employed is a question of "fact", not "opinion". The facts of this set up scream "employee".
You cannot work for one "employer" on any sort of basis (salaried or commission only) and just "claim" you are Self Employed.
The Revenue will tell you that being Self Employed is a question of "fact", not "opinion". The facts of this set up scream "employee".
Eric Mc said:
Sorry, but you are definitely NOT Self Employed.
You cannot work for one "employer" on any sort of basis (salaried or commission only) and just "claim" you are Self Employed.
The Revenue will tell you that being Self Employed is a question of "fact", not "opinion". The facts of this set up scream "employee".
right, so i take it i should be contacting the revenue and highlighting this situation? The company are just going to pay me a commission full stop for sales achieved..what am i classed as then if not self employed?You cannot work for one "employer" on any sort of basis (salaried or commission only) and just "claim" you are Self Employed.
The Revenue will tell you that being Self Employed is a question of "fact", not "opinion". The facts of this set up scream "employee".
An employee who is paid a salary based on the commission you earn. Absolutely straightforward and nothing unusual in the car sales business.
I have a client who has two employees paid on this basis - no sales = no wages.
I run the payroll for him and calculate and admimnnister the PAYE and NI on the amounts he pays these individuals.
I have a client who has two employees paid on this basis - no sales = no wages.
I run the payroll for him and calculate and admimnnister the PAYE and NI on the amounts he pays these individuals.
alsheikh said:
oh i see...looks like i better put that m3 on hold for now
I think so.Put it this way - come back to this thread in a years time and assess your financial situation and then deduct ten grand from it which is what the M3 would have cost you over a cheapy diesel.
In a years time the new shape will be out so prices will have dropped a lot, and if you have enough to buy it in cash, then you are doing well enough to consider the running costs.
I think you will thank yourself for not doing it.
It is very tempting when you start up yourself to think of all the new things you can by with your 'probable' new found wealth and it is spent before you even get it.
Sometimes it doesnt go as well as planned, and the flash purchase will be a noose around your neck which you will know has ultimately stopped you having the finance to actually make your business work!
JustinP1 said:
alsheikh said:
oh i see...looks like i better put that m3 on hold for now
I think so.Put it this way - come back to this thread in a years time and assess your financial situation and then deduct ten grand from it which is what the M3 would have cost you over a cheapy diesel.
In a years time the new shape will be out so prices will have dropped a lot, and if you have enough to buy it in cash, then you are doing well enough to consider the running costs.
I think you will thank yourself for not doing it.
It is very tempting when you start up yourself to think of all the new things you can by with your 'probable' new found wealth and it is spent before you even get it.
Sometimes it doesnt go as well as planned, and the flash purchase will be a noose around your neck which you will know has ultimately stopped you having the finance to actually make your business work!
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