Sole trader - effetive car purchase

JJnewb

Hi all,

I am an IT freelancer with my own Ltd company. I pay myself the salary required for NI contributions and draw dividends. I currently own my own car outright, with no remaining finance. I pay myself 45ppm for business miles upto 10,000pa, then reducing.

Having 160k on the clock, its beginning to cost me in repairs and although its served me well, I need to replace it. I am racking up 400-500mile per week on average, highest could be 1000.

I could do with some advice on what the most cost effective way is of changing the car. Ideally, I would like to lease something to minimise repair costs, but that will cost me for the high mileage that I do.

Do I replace the car personally on finance and continue as is?
Or could I buy a car through the company and use it as a company car? I understand there are some incentives for low emissions cars, but what are the other tax implications?

Thanks in advance,
J

property.advert

At 25k per annum, 30mpg and 60mpg would be a big difference. That is where I'd be starting.

The tax stuff does depend on how it is set up and who owns it and whether you want to write it down to zero in one year.

I think something with a long warranty would be in order, so Kia, Hyundai, Toyota and perhaps Vauxhall.

colino

If you think you are a freelancer but do it for your own Limited liability company, you really need a session with an accountant to sort out the basics. As you seem to be doing a lot of miles (with IT you should get into a mutual network to cut down on the country crossing) you need to think of the car as another tool that you use up and replace: equals lease.
Bear in mind your customer and your own company image needs too. If you are dealing with blue chips with a car park of Bentleys, they're not going to look kindly to their image being tarnished with a window cleaners Kia sitting amongst them. Be appropriate, set an image but don't look cheap.