Car vs train

hukd.deals

Hi,


I have just accepted a new job (I am contractor). Trouble is it is 80 miles away.
Driving time is around 1 hours 15 mins (as it 99.95% of motorway journey)


Train time (door to door) is 2 hours and costs 950 GBP a month !!


As driving is easy atm, 80 miles on M4, I a wondering if I'll be better of leasing a new car or buying a old car and claiming business miles as expenses. I know it is lot of driving, around 35k miles a year.


As we wanted to buy a second car anyways so thought maybe leasing atm will be better. Got a quote for a new Qashqai for 235 a month with 9 months deposit for 36k miles a year. 2 years. This seems cheap compared to train 950 a month.


I expect the job to on for a while and I generally have to work away from home in case I've to change job.


As I have not leased a car before, not sure what to do . Or just use train as this will be too much driving.


Regards

Car_54

If you’re driving to your regular place of work that sounds like commuting, which is not an allowable expense. It may also mean that HMRC may question whether you’re genuinely self-employed.

AdrianC

hukd.deals wrote: »

As driving is easy atm, 80 miles on M4, I a wondering if I'll be better of leasing a new car or buying a old car and claiming business miles as expenses.

IR35 and "Commute" notwithstanding, you can claim 45p/mile for first 10k, 25p/mile thereafter before tax kicks in. That's taking it out of your pre-tax money, not direct off HMRC.

So you're saving the tax on (45p x 10,000) + (25p x 25,000) = £10,750 by claiming through expenses, if you cover 35k/year on business. What tax rate that's at depends on how you take your money out of your company (I assume "contracting" means you have a personal services limited company?).

As we wanted to buy a second car anyways so thought maybe leasing atm will be better. Got a quote for a new Qashqai for 235 a month with 9 months deposit for 36k miles a year. 2 years. This seems cheap compared to train 950 a month.

Don't forget the "9mo deposit" means you're paying 33 x £235 to rent a car for 24 months. That's a bit over 10p/mile in rental alone.

Plus insurance, fuel, maintenance, etc.

Or just use train as this will be too much driving.

An hour and a quarter each way is a best case. If the motorway gets a little naughty, then that could easily become twice that, or more.

However you do it, it's not going to be cheap - or fun.

Cornucopia

hukd.deals wrote: »

As I have not leased a car before, not sure what to do . Or just use train as this will be too much driving.

Couple of thoughts:-

- Certain manufacturers supply Lease cars through the dealer network at competitive rates. (Skoda is one, and the rest of VAG may be, too). That could be an easier route for a first time lease, and your car will be delivered from a local dealer that way, too.

- Lease quotes tend to be quoted exclusive of VAT, so whilst your £235 is a good price, you'll need to think about how the VAT will be handled, depending on the VAT status of your company.

- You should be able to get a better lease price for a 3 or 4 year lease, and the deposit will be spread over a longer period, too.

AdrianC

Good point on VAT on the lease, Cornucopia, but if the company leases it, then there's BiK implications, in place of claiming the mileage rate.

Cornucopia

AdrianC wrote: »

Good point on VAT on the lease, Cornucopia, but if the company leases it, then there's BiK implications, in place of claiming the mileage rate.

Yes, good call. In which case, the OP will (probably) be looking at personal lease rates, with 20% VAT added on. (Will be £250+pm for a 4 year term).

hukd.deals

Sorry I was not clear, 235 is the quote including VAT.


I will be claiming back business miles only.