self employed pcp car

BigGirlPants

Good evening forumites.

 My husband is is looking to buy a new electric electric vehicle on a 0% interest pcp contract.

Are we correct in thinking as he uses his car 75% for business, he can claim claim 75% of of the monthly PCP charge?

We understand he needs to keep an accurate milage log, and can claim 75% of the running costs.

 Thank you so much.

On-the-coast

It’s a bit more complicated than that.  And I think you can’t claim the pcp part of the expense - though yiu could claim maintenance and interest (but zero interest…). Someone far more expert than me will hopefully be along soon. 

jaybeetoo

https://www.gov.uk/expenses-if-youre-self-employed/travel

BigGirlPants

jaybeetoo said:

https://www.gov.uk/expenses-if-youre-self-employed/travel

Thank you, that doesn't seem to cover cars bought on PHP though, it talks about write down expenses, on and outright purchase, but not cars on a PHP.

Mildly_Miffed

He needs to ask his accountant.

MyRealNameToo

Does he do cash or accrual accounting? The default is cash for self employed. 

BigGirlPants

He uses cash basis, and currently he doesn't use an accountant as he has been using Pie bookkeeping app and submitting his returns himself.

Car_54

It's been some years since I was self-employed, but there used to be an option to claim a simple x pence per mile to cover all car-related costs. If still available, that might be the best solution for the OP's husband.

WellKnownSid

I would agree - pence per mile or business takes on the lease (claims 50% VAT IIRC) and provides the car as a P11D perk at low BIK if electric.

Done both many times over the years.

Much cleaner going the company car / P11D route because insurance, repairs, servicing, tyres, renting a car whilst in the workshop, etc all easily expensed.

MyRealNameToo

WellKnownSid said:

I would agree - pence per mile or business takes on the lease (claims 50% VAT IIRC) and provides the car as a P11D perk at low BIK if electric.

They are self employed and are using cash accounting so P11d is irrelevant as they arent an employee and they personally are the business

WellKnownSid

MyRealNameToo said:

WellKnownSid said:

I would agree - pence per mile or business takes on the lease (claims 50% VAT IIRC) and provides the car as a P11D perk at low BIK if electric.

They are self employed and are using cash accounting so P11d is irrelevant as they arent an employee and they personally are the business

Indeed, and people start off self-employed then expand / take on more work / staff / etc.  This can be one of several financial decisions which point towards the benefit of taking on an accountant, possibly forming a limited company, as part of better tax planning or developing an exit strategy.