buying a car as a self employed

ulla_2

hi, ive got a question no one can answer, especially at tax office.

i want to buy a car this december, maybe january the latest.
now:
1. is it better to buy a new car with the bank loan? can i deduct all instolments off tax?then theoretically i do not freeze money, but whatever i spend on instolments i deduct of tax each year...

2. is it better to buy a used car with cash, paid at once (then i can only deduct 25% of the car isnt it?)

3. someone told me if i buy a car for less then £3000 i can deduct the whole amount at once within 1 tax year.is that truth?

4.if i buy a car and use 40p\mile allowance can i still add insurance on top of it and cost of the car either new or used one???
or just 40p/mile a can deduct even if i bought a car???

5. im not going to drive more than 8.000per year so which option is better for me, 40p/mile or all expenses taken together?

thanks for help.

chalkie99

You might be better asking this in the "Cutting Tax" or "Small Biz" forums which are read by some former tax inspectors who will be able to give you better answers but certainly you have to choose between the 40p per mile scheme or deducting capital expenditure - you cannot do both.

Eric_Pisch

A lot depends if your limited or just a sole trader.

Be aware that they have changed the rules drastically for cars based on there CO2

I am doing this from memory so the figures maybe out alittle, anything over 160 carbons only gets 10% write down per year, 110-159 gets 20% per year and anything under 110 gets 100% !!! So if you get something like a polo blue motion you put 100% of the cost against tax for that year.

I believe thou that lease cars are not CO2 rated as a company asset but they are as a benefit in kind for payroll.

ulla_2

thanks,
im freelancer teacher, not ltd then.
i do want small car (if new is worth it) i fancy aygo, i found the list of under 110 carbon on website does it mean that if i buy one of those cars i could deduct 100% of the buying price if new or used one?

so for example if i buy new aygo for 8.000 with the loan do i deduct full amunt i put in in the tax year i bought it (deposit plus instolments i paid within tax year plus insurance on top of it)?
or
if i buy used one for 4000 wit the cash i can deduct full 4000?

or anly percentage of it???

ulla_2

one more thing. i =ve just read about 1st year capital allowance for low emission car (then i can deduct 100% of purchase) but this is my 3rd year of business. can i still use it then????or im 2 years to late?

what if bought with instolments (do i charge full amount even though i pay instolment over next 4 years)???
thanks for help

i couldnt find "cutting tax" forum

chalkie99

ulla wrote: »

i couldnt find "cutting tax" forum

Cutting Tax Forum

Small Biz Forum