Car for business use - self employed and own use question?

blue_monkey_2

Hi all, after some car advice please. I am self employed.

I am currently using my own car for getting stock, going to PO and visiting clients.

Am wondering whether it is possible to get a cheap car through the business that I can get signwritten. It would only be a 'cheapy' so no value in it as such (under £1000) plus insurance and tax.

If I do this, would I be able to use it for my own use too? The idea was to be able to drive it around town and therefore advertise the business locally.

My husband has a work van and cannot use it without paying 3k tax for Benefit in Kind, if the same applies to this car then it would not be worth it, so trying to find out where I stand on this please.

Any help would be great, thank you.

chalkie99

If you are self employed then you are "the business" and you should be off setting some of the cost of running your present car against your tax bill already.

You have the choice of either working out what percentage of your car use is for business (collecting stock, visiting customers, etc) and deduct that percentage of running costs (insurance, fuel, etc) from your profits on your tax return or, alternatively, you can offset a fixed rate of 40p per business mile (for the first 10,000 miles per annum, 25p per mile thereafter).

With that in mind, do you actually need to buy another car? Extra tax, insurance , MOT costs etc.

One side note, if you are using your existing car for business use please make sure your insurance covers this. Also, you may need to tell your insurers if it is signwritten.

blue_monkey_2

Yes, all the above I already do - however, we do not want to signwrite it, my husband drives it, no way would he a) get a year old car signwritten and b) drive around the town advertising my business (ladies underwear!!).

For this reason I'd like to get another car that I can signwrite but want to find out of I can drive it around otherwise without having to pay the 3k benefit in kind that he would have to.

lincroft1710

A cheap old vehicle is not a good advert for a business, especially in your line!

blue_monkey_2

Why? Not all old vehicles are tatty and rubbish looking. The ones we have been looking for look fine bodywise.

Did not really answer the question though, I wasn;t looking for a critism, just some advice.

chalkie99

Yes, all the above I already do - however, we do not want to signwrite it, my husband drives it, no way would he a) get a year old car signwritten and b) drive around the town advertising my business (ladies underwear!!).

For this reason I'd like to get another car that I can signwrite but want to find out of I can drive it around otherwise without having to pay the 3k benefit in kind that he would have to.

OK, fair enough.

I think you are confused with the "Benefit in Kind".

This would apply to your husbands van if he had private use of it as he is, presumably, on PAYE with his employer.

As a self employed person you can buy things for your business and deduct their costs from your trading profit to lower your tax bill.

You could have a quick chat with an accountant to clarify this. If you do not already have one several will offer a free initial consultation to outline the basics.

NiceGuyEddie_2

blue_monkey wrote: »

Hi all, after some car advice please. I am self employed.

I am currently using my own car for getting stock, going to PO and visiting clients.

Am wondering whether it is possible to get a cheap car through the business that I can get signwritten. It would only be a 'cheapy' so no value in it as such (under £1000) plus insurance and tax.

If I do this, would I be able to use it for my own use too? The idea was to be able to drive it around town and therefore advertise the business locally.

My husband has a work van and cannot use it without paying 3k tax for Benefit in Kind, if the same applies to this car then it would not be worth it, so trying to find out where I stand on this please.

Any help would be great, thank you.

I am confused as to why your husband pays £3k tax for a work van - the BIK value of vans for the 09/10 year is £3k and it is this figure that is taxed, rather than the £3k being the actual tax charge.

Benefits in kind apply to employment rather than self-employment. As a self-employed person you can claim the business element of your fuel, repairs, servicing, insurance etc etc and you can absolutely use the vehicle for both business and personal use provided that you only claim the business element as an allowable expense.

blue_monkey_2

NiceGuyEddie wrote: »

I am confused as to why your husband pays £3k tax for a work van - the BIK value of vans for the 09/10 year is £3k and it is this figure that is taxed, rather than the £3k being the actual tax charge.

Benefits in kind apply to employment rather than self-employment. As a self-employed person you can claim the business element of your fuel, repairs, servicing, insurance etc etc and you can absolutely use the vehicle for both business and personal use provided that you only claim the business element as an allowable expense.

Thanks Eddie, that is fine, it will be 50/50 so nice to know I can use it for both.

In regards to the BIK, I know it's taxed 3k (actual cost £600) but we was told that 3k would be added to his wage which then means we would lose the disability premium for my son from TC and it would not have been worth it.

It is a 2 seater van so hubby cannot go anywhere in it when he has the children so he is stuck and this is why we decided it was not worth it. I've started doing pamper evenings so if he needs to get out because of an emergency, I would prefer that he could do that in our car and not it be with me.

Savvy_Sue

Am I right in thinking that there are some tax advantages in having a business van rather than a business car if you are self employed? And if I'm right, maybe someone could tell b_m what they are ...

Alternatively I've seen motorised trikes (I think) used by various local businesses here, which are very cheap to run in terms of road tax etc. They are sign-written.

blue_monkey_2

Thats a good idea as it goes, never thought of a van, just thought of a car. We was going to get a 4x4 for the business though as I have it to fall back on when it is snowy here. I am housebound otherwise as we cannot get in or out of the village, so this is why I wanted it 50/50 business/personal. I wanted to know I could use it if I needed to.

I'd love a double cab L200 but tht's NEVER going to happen, LOL. They cost a bomb!

After posting about my hubby not being too happy about driving around town with my lingerie business advertised on the car, I was out with the dogs yesterday and this dirty old builders van came past, covered in mud..... and on it was a couple of stick on sticker things advertising his/his wifes business for 'adult services and pole dancing equipment'. LOL.

Savvy_Sue

Driving instructors often have a removable advert on their cars. Sometimes I think it's magnetic, so easy to remove without leaving too much evidence. However even something like that is likely to reduce re-sale value, because there will BE some sign of it, so it will be obvious the car's been used for other than SDP purposes.

While you're researching the tax implications, it's worth continuing to think about what you REALLY need and what would just be nice. Would be frustrating to go for the trike idea and then realise that you really do need two cars which can take at least 3 people.

LOL at the builder's van, I wonder if she uses his scaffold poles?