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My understanding of this is not too clear but if petrol is going to be 5p/litre more expensive by Easter and over 50% of what we pay goes to the Exchequer surely that is a good chunk of the increase proposed for September, if I have the date right?
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The chancellor gets fuel duty and VAT from punters
The recent 5p increase is due to supply and depreciation of the £
Of the 5p the chancellor would get 0.84p (the vat element)...but only punter's cash..........VAT registered businesses claim back the VAT
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Any accountants on here?
Can we run our vehicles as companies and claim the VAT back?
We can register a Ltd co. to "Provide therapy through the automotive experience"
Charge for the service inc VAT, but as fuel is so expensive, make a loss.
Claim back the VAT and write off costs against profits such that we are quids in by the end of the year.
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I can assure you the hassle of VAT registration is not worth saving 20%, unless you are retired and have nothing else to do!
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Quite right BB. The next duty rise (3.02p per litre) is scheduled for September, with annual rises each September after that.
Though of course the rise may yet be postponed/cancelled again.
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If you run a cheap car it is worth being self-employed and using it for a business/personal mix as you get 35p a mile off your taxable income for the business mileage regardless of the actual cost, so a cheaper car thats good on fuel actually creates a gain. Helps to buffer high fuel costs.
My accountant said its one of those rules that defies logic but a gift is a gift. The irony is that when I ran a separate business vehicle I was entitled to claim less. Taxation is bonkers.
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We just have to accept the high way robbery what is going on regarding our fuel prices.
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Called in to Hopwood Park M42 Services today Diesel @ £155.9 or was i seeing things.
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45 p per mile for the first 10,000 business miles. As you say, cheap high mpg car makes a lot of sense.
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>>45 p per mile for the first 10,000 business miles. As you say, cheap high mpg car makes a lot of sense <<
Was 35p last April when I last had my tax return done and that was up from 30p the year before - has it jumped up again?
Its hard to make a profit on paper when every mile I do I get an extra 10p knocked off my taxable income over and above the actual cost.
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It was 45p when I did mine last year Stu, sack your accountant!
Pat
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Maybe I wasnt listening :-)
Was it 40p for 2011? I remember she said it had gone up 5p. I will have to check the TR and see how much she claimed.
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Just checked and she did claim at 45p, my mistake :-)
My car costs 24p per mile so it is quite a gain. Tax is crazy.
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To be fair, the cars you run are unusually small, cheap to buy and cheap to run for business transport. If, for example, you had to run a van, medium estate or buy a newer car instead, 45p a mile wouldn't go far!
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I used to run a van and they are certainly heavy on fuel, mine did about 38 mpg against the 55 ish my car will do any day of the week. At the end of the day, the car does the job though and that is what counts.
About the only disadvantage of running a car for personal/business is you dont get the capital losses from depreciation of the car when you sell it which knocks a big chunk off your taxable.
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As you're self employed, you're only getting tax relief on the 45p, so the benefit to you, assuming std rate tax payer is only 15p/mile (inc NI) - still better than nothing though! If you were employed, and your employer pays you 45p a mile, it is tax free, and you get the benefit of the full 45p.
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Richard, I fall below the threshold for income tax now since it keeps jumping up so I dont actually pay any income tax, only NI every 6 months.
My business mileage last year knocked £2.5k off my taxable income, the actual vehicle cost was around the £1.3k mark.
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>> If you run a cheap car it is worth being self-employed and using it for
>> a business/personal mix as you get 35p a mile off your taxable income for the
>> business mileage regardless of the actual cost, so a cheaper car thats good on fuel
>> actually creates a gain. Helps to buffer high fuel costs.
>>
>> My accountant said its one of those rules that defies logic but a gift is
>> a gift. The irony is that when I ran a separate business vehicle I was
>> entitled to claim less. Taxation is bonkers.
>>
I would suspect though that this would be offset by the higher insurance premium payable for business use. Or can you claim that back as well?
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HM, the 45p covers ALL of your motoring costs. The only additional items that can be claimed are finance charges (if self employed) and parking charges.
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Fuel Duty Increase - Falkirk Bairn
