Can I offset a car purchase against tax as a ST?

Smart_But_Casual

As well as my FT job I'm a registered ST and for that I need transport. So, can a new car purchase be offset?

Thank you.

fengirl_2

What is ST?

Smart_But_Casual

fengirl wrote: »

What is ST?

Sole Trader.

morgani

Effectively yes.

You can claim Capital allowances but for a non commercial vehicle you will almost certainly need to reduce the amount you claim for any private usage of the vehicle.

fengirl_2

Also, you would not be able to use the 40p/25p per mile method of motor costs. You would need to use the actual costs method and, as morgani says, add back the private use.

Cuteybabe8

I had the same question. So the replies have been useful.

tim.charles_2

Why can't he use the 40p/25p per mile method if his turnover is under £68k

Pennywise

tim.charles wrote: »

Why can't he use the 40p/25p per mile method if his turnover is under £68k

Because he's wanting to claim capital allowances on the purchase of the car. You can't have it both ways. It's either capital allowances & actual running costs or the mileage rate - one or the other.

Smart_But_Casual

Pennywise wrote: »

Because he's wanting to claim capital allowances on the purchase of the car. You can't have it both ways. It's either capital allowances & actual running costs or the mileage rate - one or the other.

So I can claim 20% of the value of the motor or the milage?

morgani

You can claim either

Business proportions of:-

The value of car
Running costs (fuel, tax, repairs, servicing, etc)

OR

mileage at 40p/25p per mile

James_Trimby

The capital allowances for a car vary with CO2 emmisions 20% pa normal. Less than 110 CO2 can calim 100% allowance and > 160 10% pa only All rates apply each year to the remaining amount from previous year (reducing balance) BUT from this figure you need to adjust private use so say £10,000 car 150 CO2 60% private First year claim 10000 x 20% x 40% = £800 and the amount carried forward to next year £8000. When you sell deduct from brought forward amount. Difference either creates a profit or loss (BUT also apply the private proportion adjustment to this.)

You can (if below VAT threshold) just charge yourself 40ppm (up to 10,000 pa then 25p) for business use only with NO other claim for the car costs etc... You just need to way up the estimated costs/depreciation etc and business/private use and compare to see which is likely to be best (plus mileage only is easier!) not supposed to chop and change so estimate well!

HINT the % business/private is per tax period so if selling at a loss compared to tax value might be worth trying to keep private use down that year to up the % alllowed. DItto the reverse but if doing this keep good records!