New car tax relief

jackaboy19

Hi, my boyfriend is a private hire driver and he's bought a new private hire car. As well as the capital allowances on the cost of the car can he also claim tax relief on the interest paid on the loan?

Also - he takes a percentage off his repairs and petrol for private use - should he also take a percentage off for his insurance & roadside recovery etc?

CKhalvashi

jackaboy19 wrote: »

Hi, my boyfriend is a private hire driver and he's bought a new private hire car. As well as the capital allowances on the cost of the car can he also claim tax relief on the interest paid on the loan?

Also - he takes a percentage off his repairs and petrol for private use - should he also take a percentage off for his insurance & roadside recovery etc?

Yes he can, if the car is used mainly as a taxi (PHV's come into the same band as taxis for this purpose.)

He can also claim interest.

What he may be best doing for last tax year, and next tax year, is claiming the 45p, then 25p a mile. This is possibly not relevant for this tax year, due to the cost of the car.

Circumstances do change year by year, and you should be able to change this yearly to work out how he's better off.

CK

jackaboy19

Hi CKhalvashi,

Thanks very much for that, and sorry to push it...but what is the mileage thing you're talking about?

"What he may be best doing for last tax year, and next tax year, is claiming the 45p, then 25p a mile. This is possibly not relevant for this tax year, due to the cost of the car."

Thanks again.:o

CKhalvashi

jackaboy19 wrote: »

Hi CKhalvashi,

Thanks very much for that, and sorry to push it...but what is the mileage thing you're talking about?

"What he may be best doing for last tax year, and next tax year, is claiming the 45p, then 25p a mile. This is possibly not relevant for this tax year, due to the cost of the car."

Thanks again.:o

He can either claim the true cost of running the car, or an allowance of 45p a mile for the first 10,000 miles, then 25p a mile after this.

This year, as a PHV can be 100% offset, he'll probably be better off claiming the true running costs (and then having little/no tax to pay, as whenever I did this, I showed a loss). He can them put, say, 80% of fuel and maintenance costs on top.

Next year, if he claimed 45p/25p, it would probably work out tax-efficient, unless his insurance is huge!

I did some night driving for my OH, who owned a firm for 8 years, so I know some of the tax tricks there

CK