I am self employed and having just finished this years accounts and got my figures back from my accountant , I was shocked at how much allowance on investment gets allocated against expenditure
For the last 10 years , I purchased low cost 500-1100 cars , run them for a year or so and then bought another , partly due to limited budget, partly cause , two of those I purchased for 500 , lasted me 18-24 months , which as I do high mileage were very good buys.
Then 18 months ago I had a little more money so I spent 6k on an 09 Alhambra .
I was SHocked that this Investment in my business , ONLY had an ALLOWANCE against Tax , of 8% of about 500...., I’m led to beleive it’s based on CO2’s ? If it had been a Van , the % would be higher , surely a 2lt van and car give off the same Co2’s So why are they taxed differently .Being an Alhambra , if I blocked off the back windows, can I claim it as a van ? For future years
I didn’t notice over previous years ,cause the purchases were so cheap
...now should that car have been a lemon , and I’d had to buy another vehicle , I’d have lost 5.5k and it not taken into account against my earnings....or am I wrong ? Providing I keep it 12 years , it should just about get my full expenditure accounted for ? , although I’m led to beleive next year I get 8% of 6,000-500= 5,500. , so about 440 etc
Anyway, how do others, who are self employed and have to use their vehicle daily to get too and from clients do it any tips greatly appreciated . And before anyone asks yes I do need an MPV sized vehicle or a van , I just prefer to drive a car
Next time I think I’ll do a lease and probably a van.....
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When I was self employed (as an IT contractor) most sources advised that buying a car on the company could be fraught with issue so I didn't do it.
I think if you could absolutely prove it was only used on company business then it was OK.
Seemed good enough to me to buy the car out of my own money then claim the mileage for each business mile (somewhere around 40p per mile for the first 10000 when I was doing it)
Maybe the type of business has an effect too.
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I'm in the same position as that, self employed and running cars that cost £700 - £1000 till they drop. I usually get at least three years out of them before they go to the scrappy. I have never bothered to claim capital expenditure, just running costs. If anything I have not claimed all that I could on those either (It's actually 45p per mile for the first 10,000 and I think 25p after that).
I don't use an accountant so I don't bother with getting too complicated with what I claim, the odd bit I lose is cheaper than employing one.
Last edited by: Robin O'Reliant on Sun 13 May 18 at 11:36
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EVs have 100% WDA in year one.
www.gov.uk/capital-allowances/first-year-allowances
Last edited by: Lygonos on Sun 13 May 18 at 13:46
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>>I don't use an accountant so I don't bother with getting too complicated with what I claim, the odd bit I lose is cheaper than employing one.<<
I do pretty much the same, I just keep an accurate business mileage record and claim the 45ppm rather than get involved in capital expenses.
I don't earn enough to pay income tax these days so there is little incentive to make it complicated.
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>>When I was self employed (as an IT contractor) most sources advised that buying a car on the company could be fraught with issue so I didn't do it.
I agree. These days it simply isn't worth it, though it used to be.
Buy a car, claim the mileage and leave it at that, is my advice. There are ways and means, but most of them are a great deal of work and typically not worth it in my opinion except in very individual and unique circumstances.
The advice changes dramatically if there is a second person and a second vehicle involved, but for a one-man, give it a miss.
If it is a van, and you also have a car, and the van truly is for business only, then that can be different. The main stepping stone is sole usage; that the company has to buy it, the company has to sell it and ONLY the company may use it. No private mileage without significant tax implications again.
And you may have to prove it.
It is easier if it is a special use vehicle; something that would not ever be used privately.
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Thank you all for your responses
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Self employment and buying a car - smokie
