How much can you claim for use of your car for business if you are in self employment

tomtom999

I am still deciding on what car to buy and was thinking of either business contract hire, PCP or HP but needed to know which is best to take when you use your car for self employment and what is allowable against your self employment income.

Appreciate all the help

peter_the_piper

I can't help much, I usually put all the invoices into my acccountant and let him sort it, its what I pay him for. Maybe it would be wise to phone your accountant and ask.

neilmcl

Are you using the car solely for business use or a mixture of private and business use?

You probably need to discuss your options with your accountant.

colino

You can totally fund the car from business income, split the costs between private and business use, right down to you buying the car and charging the business a fixed ppm. Your circumstances, amount of business use, type of business use and business savvy will all help you with the right choice. However, if you need to ask the question, arm yourself with the business needs and ask an accountant for their professional advice.

londonTiger

Speak to an accountant or bookkeeper to guide you.

You can elect to claim a proportion of your total motor expenses (fuel, insurance, maintenance etc). Or you can claim mileage but not both.

You'll have to work out your total annual motoring costs and divide by the proportion of business use.

If you're low mileage it might be more cost effective to claim a proportion of total expenses. If you are a high mileage user the 45p per mile might be better.

General rule. If your annual fuel cost is more than your insurance & maintenance cost than claiming mileage is more tax efficient. If not then consider going by proportion of total expenses route.