Buying a secondhand car

allanf_3

Hi,

Im currently self employed (but not registered with yet - im still within my 3 months, i will get round to doing that in the new year).

My question is that im about to buy a new second har car.

Can i claim tax relief on this when i get an accountant, or can you only do that if i buy a car new? If i can claim tax relief, what do i need to get to prove i've bought it as ill be buying in a private sale and therefore wont have a headed letter receipt.

Any help would be greatly appreciated

Cheers

fengirl_2

You will claim capital allowances which are calculated at 25% of the initial cost of the vehicle. You will only have to prove the purchase price if you are investigated, which, hopefully, is remote. You will have to pay with something, eg can you show a cash withdrawal from your bank to pay for it?

ks62uk

As the car is bought after 6 April 2008, the allowance is 20% on the reducing balance basis (maximum allowance is £3k) .
The allowance is then adjusted for private use. So for example:
Car cost £5000
Allowance @ 20% £1000 (Value carried forward for the next year's calculation = £4000)
50% private use reduces the allowance claimable in your tax return to £500

You will need a receipt to prove you have bought the car anyway in case of any dispute with the seller.