Capital Allowances on Cars

Cute_'n'_Quirky

I have been self-employed for over 20 years and have claimed Capital Allowance on all of the cars I have had in that time.

I now have DLA and have a car from the Motability Scheme on Contract Hire.

DLA take £43.45 per week away from me to pay for the vehicle including insurance, road fund tax, tyres, servicing, etc. I only now pay for the petrol.

Can I claim tax relief on the £43.45 per week that I am "paying" for my vehicle?

I know that I can claim petrol allowance as opposed to mileage allowance and that is not a problem.

I have trawled the HMRC site but cannot find the details on Contract Hire vehicles.

I know it was never allowed but have been speaking to someone today who has his car on Contract Hire who claims on his SA Tax return - his brother is an Accountant and he says this is alright.

Anyone know?????

dejongj

It sounds to good to be true to be able to claim capital allowance on something you don't own the capital for....But then again I wouldn't be surprised by anything anymore..But I'll leave this to someone who actually knows....But I am interested on how capital allowance would be possible on something that is not capital....

Cute_'n'_Quirky

I am thinking that maybe it is being able to claim on the outgoing expense.

Cute_'n'_Quirky

I acquired the Motability vehicle in January of this year.

I am allowed to go back and forth to my place of work with a Motability vehicle. I work as self-employed for a Company but I go to an office each day. Therefore the insurance is not an issue.

There used to be a restriction on being able to claim the costs of a leased or contract hire vehicle - is that still in place?

dejongj

Doesn't the mileage allowance cater for this...

Cute_'n'_Quirky

Apparently I cannot claim mileage allowance since the Motability Scheme includes insurance, RFT, tyres, servicing, etc.
I can only claim for usage of petrol

I wish I could find out if I can claim on the monthly payments that are taken from me.

Cute_'n'_Quirky

No, I have not been doing anything wrong or falsely claiming anything from anybody and you are wrong to assume this.

You have added 2 + 2 and come to 26.

I shall ask my tax inspector re this issue since it is obvious that everyone here is at best just guessing and at worst, accusing me of fraud.

WHA

The car isn't costing you anything, so there is no expense to claim against tax.

Cute_'n'_Quirky

On the contrary, the car costs me £188.30 in a monthly payment.

WHA

Cute_n_Quirky wrote: »

On the contrary, the car costs me £188.30 in a monthly payment.

Yes but is that deducted from what you would have otherwise been paid in DLA, or do you get your DLA and then have to pay the money out. There is a massive difference for tax purposes. For tax relief you have to make payment, a reduction of an income is not the same as a payment for tax purposes.

I would also echo the views of others about the travelling. To claim tax relief, you must be making a claim that you work from home and the travel is business travel - you don't get tax relief for home to work. For motability, you are claiming is is home to work. There is a clear difference in what you are claiming - one or other must be wrong, both your claims can't be right. I suspect that your home to work travel is not allowable anyway having looked at the HMRC manual on travelling claims as it is clear you do most of your work at your clients premises - it is where the work is done that matter, not where the admin is carried out.

Cute_'n'_Quirky

Just found this Jimmo - thank you!

I emailed Motability. If I do eventually need the Motability Car for business use - which I may do - I am allowed to upgrade my car insurance to full business use by paying a small fee.

So not a problem either way.