Tax exspenses

markharriers

Good evening 😁

I use a car for my self employed bussiness and my question is as i now need a new car as mine is broken will i be able to claim the cost of a new car as a exspense? Im currently using the cash basis system, any help greatly received 👍

MDMD

Generally for most assets you buy you can deduct the value as an expense if you are on the cash basis. The exception is for cars

Cars are covered by the Capital Allowance regime, but you can’t claim the full cost immediately as it is a capital asset on which a 100% deduction via the Annual Investment Allowance is not available (unless a very low emission car for which a separate first year allowance is available - see second link below).

Do you use the car only for business or some private? If the latter you will need to apportion the usage between them (and keep a record in case of HMRC enquires).

You can then claim capital allowances based on a percentage of the tax value of car. This is a writing down allowance of either 18% or 6% per year depending on the CO2 emissions. Each year you calculate a deduction for it on the reducing balance method (Google this if you don’t know what it means, there are some examples online).

https://www.litrg.org.uk/tax-guides/self-employment/working-out-profits-losses-and-capital-allowance/what-capital-allowances

https://www.which.co.uk/money/tax/income-tax/income-tax-for-the-self-employed/self-employed-capital-allowances-avpv55d7886g#headline_4

00ec25

so how have you been claiming for the current (now broken) car?

mileage rate?
or
was that originally also on capital allowances? if yes, who is going to do the balancing charge calculation for you as I'll assume that is not something you are familiar with?

markharriers

Thank you both for your help and advice.

So yes i do use the vehicle for private use also and as far as the vehicle exspenses go i just claim the mileage allowance.

I work full time employed, but the bussiness in question is my self employed side line, i owe a fair bit of tax and was hoping getting the new vehicle could be a exspense.

I also looked at buying a sofa for my house for when customers come round but again i bet this wouldn't be able to be claimed for.

I have also bought a lot of second hand goods and paid cash for so this is also very frustrating ����

silvercar

I also looked at buying a sofa for my house for when customers come round but again i bet this wouldn't be able to be claimed for.

A fair few years ago I had a random tax inspection and working from home, the tax inspector commented that she had walked into houses where the lounge was set up with a little sign on the main sofa (directly in front of the tv). The sign said "for customer use only". He wasn't convinced.

00ec25

markharriers wrote: »

Thank you both for your help and advice.

So yes i do use the vehicle for private use also and as far as the vehicle exspenses go i just claim the mileage allowance.

I work full time employed, but the bussiness in question is my self employed side line, i owe a fair bit of tax and was hoping getting the new vehicle could be a exspense.

I also looked at buying a sofa for my house for when customers come round but again i bet this wouldn't be able to be claimed for. forget it - the tax phrase is "duality of purpose" - you cannot possibly substantiate a business use and therefore it is totally disallowed.

I take it you do not have an accountant, cars are single asset pools

cost x applicable (see CO2 table) rate allowance x % business use = deduction to use in calculating your taxable profit

https://www.gov.uk/capital-allowances/business-cars

markharriers wrote: »

I have also bought a lot of second hand goods and paid cash for so this is also very frustrating ����

what goods?
how do you use in the business: stock for sale or a capital asset?

since you bought them "cheap" because they were a) second hand and b) in cash, so I assume no receipt and off the record, so you can hardly be frustrated over the money you have already saved, which is probably a lot more than any % tax saving had you paid full cost

BoGoF

Clearly not a typo given the number of times you have said it......it's expense not exspense..

SA100

This may not be suitable for you but I believe you can buy a 4 door pick up truck - Ford Ranger, Toyota Hilux etc. They are much like a SUV inside. But are classed as a Van and you can claim the VAT back etc and I believe a percentage if used for work purposes. I am no expert so worth having a google. As I could be wrong.

dont_use_vistaprint

Just found out been on BR since July so not saved enough for next year.

Can anyone help estimate how much a month one should save on this code, earning 97.5 plus £3500 in medical benefit, no other PAYE type income. Other incomes , CB tax, capital gains, gift aid in SA etc but just want to initially work out the PAYE variance as it looks like its a permanent code for me with overseas employer.

Thanks

BoGoF

Start your own thread.

Pennywise

SA100 wrote: »

This may not be suitable for you but I believe you can buy a 4 door pick up truck - Ford Ranger, Toyota Hilux etc. They are much like a SUV inside. But are classed as a Van and you can claim the VAT back etc and I believe a percentage if used for work purposes. I am no expert so worth having a google. As I could be wrong.

The OP hasn't said if they're VAT registered or not, so if not, they won't be able to reclaim the VAT.

Van or not, they'll still have to make an adjustment for the private use of the vehicle, i.e. only claim the business proportion. (Assuming the OP isn't trading as a limited company).