PAYE to Self employed car advice needed

Dartmaster

Hi All
Next month I will leave my PAYE job and go self employed the week after I leave. 
I need  to buy a car as I currently have a company car, I will need to buy this now so its ready for when I start self employment. How do I include the cost of it in my tax return as the purchase will be before I register as self employed.
Hope this makes sense.

Grumpy_chap

Dartmaster said:

Hi All
Next month I will leave my PAYE job and go self employed the week after I leave. 
I need  to buy a car as I currently have a company car, I will need to buy this now so its ready for when I start self employment. How do I include the cost of it in my tax return as the purchase will be before I register as self employed.
Hope this makes sense.

You can register as sole trader now.

It will probably be simpler to use AMAP mileage rates, and just as tax efficient.

DullGreyGuy

Dartmaster said:

Hi All
Next month I will leave my PAYE job and go self employed the week after I leave. 
I need  to buy a car as I currently have a company car, I will need to buy this now so its ready for when I start self employment. How do I include the cost of it in my tax return as the purchase will be before I register as self employed.
Hope this makes sense.

With a company car your employer pays for it and you have to pay BIK tax because you get personal use for it. 

Being self employed you have to buy the car and you can charge a proportion of its costs as an expense, the easiest way to do this is the normal mileage (same as if you were an employee using your personal car).

Marcon

Dartmaster said:

Hi All
Next month I will leave my PAYE job and go self employed the week after I leave. 
I need  to buy a car as I currently have a company car, I will need to buy this now so its ready for when I start self employment. How do I include the cost of it in my tax return as the purchase will be before I register as self employed.
Hope this makes sense.

You might want to consider doing a bit of reading about becoming self employed: https://www.gov.uk/browse/business

or possibly getting some professional help from an accountant to ensure everything is set up/properly recorded from the outset (especially if your turnover means you will need to register for VAT).

Dartmaster

Thanks for the response Macron.

Sounds strange but I need to register as unemployed due to the child maintenance service will keep my payments at the same rate as now (which i wont be able to make during the first 6 month of self employment).

I need the car for the first day I will start self employment so need to buy this now.

Can i buy the car and give the sole trader start date a few months after I actually start to include the deposit on the car?

Grumpy_chap

Will you be buying a car or a van?
Will you have any private use of the vehicle?
The rules around expenses for vehicle when self-employed are quite strict and quite complex.
How many business miles will you be covering?
The AMAP rates 45 pence / 25 pence per mile are far simpler and often work out favourable than actual cost basis (proportioned for private use).

DullGreyGuy

Any reason you are not just going to use the simplified method of 45p per mile?

If you are saying the business is going to part buy the car that pushes you down a much more complex accounting approach. You cannot mix and match either, if you say the car is 50% personal and 50% business you cannot claim 50% of the deposit, as you put it, and then 45p per mile, you would then be locked into doing everything based on actual costs.