New car self employed

ratkarth

Anyone got an idea on if there is an advantage to me getting my next car with hp or leasing rather than buying outright, I am newly self employed and use my car more than 50 percent of the time for business

forgotmyname

You get to waste lots of money on a shiny car that you will never own. Does that appeal to you?

Speak to your accountant, maybe sensible in some cases.

Flyboy152

ratkarth wrote: »

Anyone got an idea on if there is an advantage to me getting my next car with hp or leasing rather than buying outright, I am newly self employed and use my car more than 50 percent of the time for business

If you are VAT registered, you can reclaim fifty per cent of the VAT on the rentals. You will be able offset the cost of the rentals against your taxable income, if the car is moderately priced. If it costs more than twelve thousand pounds, there is a reduction based on the "half excess rule." It can be quite tax efficient to use an opertaing lease.

A finance lease is slightly different, if the car is registered to the business, it may qualify for capital allowances etc., but it may be treated differently for VAT purposes.

Using an operating lease (contract hire) is often the most cost effective way to lease. If you include maintenance and tyres etc. it helps with consistent and accurate cash flow planning, minimum capital outlay and no depreciation or disposal risk.

Flyboy152

forgotmyname wrote: »

You get to waste lots of money on a shiny car that you will never own. Does that appeal to you?

Speak to your accountant, maybe sensible in some cases.

That very much depends on what leasing method the OP uses.

bigjl

There are some tax advantages if you contract hire or lease a car with less than 100g/km of co2.

There are more cars than you think that qualify, not just the new shape Prius.

There is the 3cylinder diesel version of the new upcoming Rio, one of the new upcoming Picanto range. Also the Fiat 500 Twinair. And a new version of the Clio with a specially tuned version of the DCi 1.5 lump with over 80bhp.

There are almost certainly others from other manufacturers, but after looking at the upcoming Rio which will do over 80mpg allegedly, is a full sized 5 dr car not a cramped supermini like the Fiat 500.

Flyboy152

bigjl wrote: »

There are some tax advantages if you contract hire or lease a car with less than 100g/km of co2.

There are more cars than you think that qualify, not just the new shape Prius.

There is the 3cylinder diesel version of the new upcoming Rio, one of the new upcoming Picanto range. Also the Fiat 500 Twinair. And a new version of the Clio with a specially tuned version of the DCi 1.5 lump with over 80bhp.

There are almost certainly others from other manufacturers, but after looking at the upcoming Rio which will do over 80mpg allegedly, is a full sized 5 dr car not a cramped supermini like the Fiat 500.

The tax advantages are not limited to cars with lower emissions than 100g/km.