Car hire business - self employed

johnreynolds59

Around 2 years ago I treated myself to a lifetime ambition of mine and bought the car of my dreams, a 12 year old Ferrari 456GT. I paid £33,000 for the vehicle which at one time cost £172,000. In order to help pay for the high maintenance and running costs i started to ‘hire’ it out. I put together a modest website and I hire the car (no self drive chauffer driven only) for weddings, special occasions etc. I am in control of how often, where etc so we are looking at a first year turnover of only £5000.

I am wondering what would be the best way of completing my tax return? Should I/can i claim the 40p per mile for the hire’s that I have done and that’s it – it costs a lot more than 40p per mile to run as it only does 9.5 miles per gallon and a full service is around £2,500!

Or should I look at claiming another way for separate insurance, maintenance etc?
Can I claim for cleaning valleting expenses? I have to do this for every hire and also decorative ribbons etc and also chauffeurs uniform/cleaning etc.
Can I claim for marketing – setting up and administrating the website?

fengirl_2

No, you should include in your accounts all the running costs of the car and then add back in the tax return the proportion relating to your private use of the vehicle. You should also include in your accounts everything to do with running the business - cleaning, website, advertising, etc etc. If you had a separate bank account for all your business transactions, you would find this easier. Lastly, you will claim capital allowances on the value of the vehicle at the start of the period.
Don't forget you are not claiming anything - you are including a deduction in your accounts for the outgoings of the business.

jimmo

Excuse my ignorance but I am struggling to appreciate how a Ferrari 456, driven by a chauffer, can possibly be used as a wedding car. A quick search showed me a 2 door coupe and the feeling that the back seat is virtually no more than a shelf. 4 seater sedans seem to be fantastically rare and, if you have one of them, then I find it hard to think that it is depreciating in value.
I think there a 2 key issues.
1) What proportion of your use of the car is business and what is private?
2) How much time are you prepared to devote to your business accounts?
The 40ppm system is designed for the average Joe driving an average car doing an average amount of business mileage. That’s not you.
Fengirl’s post is probably right on a pure tax efficiency basis but I just fear that your treasured possession will rust away whilst you are pouring over your tax records.
Personally, I really admire your achievement of getting the car of your dreams. If I were in your position I would take the 40ppm route just to keep it simple.

johnreynolds59

Thanks for your thoughts and comments ...... i at the present 'value' of my business i am inclined to go with your consensus and keep it simple, if the business grows i would be inclined to go the other route

About the car - The 456GT is actually quite roomy in the front and rear "designed to travel across continents, at speed, in comfort" so the adverts say anyway!

People are always looking for something different for their weddings and other special occasions, the majority of hires have been perspective wives hiring the car to get the groom to the church in style, booked as a special surprise?

One hire was a couple from London who were both half Italian, he worked for Bentley (designer) and he could have had ANY of the Bentley range as his wedding car FREE of charge but being Italian, for him it had to be an Italian car .......... she was less enthused, very tight, fragile dress etc etc. Horses for courses?

knottbay

Hi
I have a vintage car and I am considering hiring it out. Do you know what regulations I have to satisfy if any , or what the situation might be regarding insurance?
Best wishes
Nick

johnreynolds59 wrote: »

Around 2 years ago I treated myself to a lifetime ambition of mine and bought the car of my dreams, a 12 year old Ferrari 456GT. I paid £33,000 for the vehicle which at one time cost £172,000. In order to help pay for the high maintenance and running costs i started to ‘hire’ it out. I put together a modest website and I hire the car (no self drive chauffer driven only) for weddings, special occasions etc. I am in control of how often, where etc so we are looking at a first year turnover of only £5000.

I am wondering what would be the best way of completing my tax return? Should I/can i claim the 40p per mile for the hire’s that I have done and that’s it – it costs a lot more than 40p per mile to run as it only does 9.5 miles per gallon and a full service is around £2,500!

Or should I look at claiming another way for separate insurance, maintenance etc?
Can I claim for cleaning valleting expenses? I have to do this for every hire and also decorative ribbons etc and also chauffeurs uniform/cleaning etc.
Can I claim for marketing – setting up and administrating the website?

johnreynolds59

You will need to shop around to find a company that will meet your specific requirements. Norwjch Union do a Classic Car Policy that covers the vehicle for SDP and wedding hire. You can apply online.