Business car advice,chpr 2 lease or buy?

eliyza1

Hi Everyone,

I am only 3 months into my new business. I have a 2nd hand book shop! Woo hoo.

However I live a million miles from the shop and the petrol in my jeep is killing me and the environment.

Hubby and I have had the idea to get a small car just to go to work and back to save petrol, but obviously I do use it for book collection/auctions etc for the business.

We haven't much money saved, but wondered if anyone can explain the benefits (if any) to buying a car through the business (rather than personally) or what is the benefit of leasing through the business (if any)

To sum up (very difficult for a rambler like me) is it better to buy it as a personal car. Buy it as a business car or lease it thru the business?

any and all advice very much appreciated.

Eliyza.

jasmin10

I asked my accountant the same question as we are wanting to buy a new car and thought it might benefit us more by putting it through the books.

He said that unless it was over £13k it's not worth it as after tax relief etc your would only benefit by about £100 or so quid.

So we're not bothering.

fengirl_2

It really all depends on what your business mileage is and what you are planning to pay for your car.
If you leased a car, your lease payments would be a business expense, but the private proportion (travel to and from the shop and other private use) would be disallowed for tax.
If you bought a car, you would claim capital allowances on the original price and the car would be depareciated over the years. Again, the private use would be disallowed for tax.
On top of CA's, you would include in your accounts all the running costs of the car from servicing to petrol, and again, the private proportion would be disallowed for tax.
if you took out a loan to buy the car, the interest on the loan would go in your accounts but the private proportion would be disallowed.
Without actual figures its hard to be more helpful.

eliyza1

Thank you all for such a thorough reply. That is very helpful. I do a fair amount of miles to auctions etc, I would say at least 1/2 the miles are genuine business, so think from what you said, it would be worth looking into purchasing through the business, I have decided to keep a log for a month to see how the mileage splits down as at least that would take aways some of the guesswork.

Thank you very much once again.

jasmin10

My mileage is also 1/2 and 1/2. I was also doing a mileage sheet. When I saw my accountant he said for me and my husband just to take it in turns filling it up with fuel and then to keep the car insurance and car tax stuff and he would re-apportion it for me come tax year.