New car and Other expense for start up salesman

zachthackray

HI there,

I work as a sales agent and have just had to become self employed. The single biggest outgoing will be funding a vehicle. As I am setting up the business from scratch I'm trying to work out which is the best route to go down. I can be self employed or form a ltd company. I would love to hear other peoples thoughts on this and the effect on tax/operating costs.

Because of the nature of the business I will need a large estate so the list price of the car will be fairly high, but I have been looking at cars that have a low co2 rating (under 150g) so tax should be cut down in this area. I am also happy to consider a second hand car if my profit would remain higher.

If i'm right, under a self employed basis (sole trader) I would have little of the company car tax issues that I would incur if the business was a Ltd company. If i go this route (ltd) I would have to -

a) operate the car as a company car, meaning I would have to pay the relevant co car tax and keep my earnings/drawing under 40k to avoid higher income tax band.

b) use my own income (capped) to fund a car and claim back 40/20p per mile, this option only seems to work if you have a very cheap car with little monthly outlay.

The other big consideration in all this will of course be the cost of fuel particularly as anticipate travelling plus 20k a year, perhaps this is somewhere being ltd i could save cash?

So at the moment the self employed route looks a little more attractive especially as i have no liabilities like employees or offices.

Look forward to hearing everyones point of view.

Mary_Hartnell

Can I assume you are getting a diesel ( or even a liquid gas one) ?

You can run the car as a self employed person - it is just a lot of hassle keeping all the records & doing all the accounting and capital allowance/ write-off/depreciation stuff.

How many miles a year are you expecting to do?

zachthackray

Yes defo diesel. Was seriously considering LPG but the set up costs don't seem to outweigh the benefits specialy when you consider the cars I'm looking at are quoting figures up to 70 mpg. Mileage will be +20000 mpa

zachthackray

Also I should add that I will have a book keeper and accountant so real hassle for me just need to be cost effective