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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 14000
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I need to purchase another vehicle as old car has broken

Customer Question

Hi , I need to purchase another vehicle as old car has broken down and beyond economical repair. I work full time on the cards and work self employed as a dog groomer at weekends ( sole trader). What are my best options for vehicle purchase and what can I claim back. Does it have to be classed as a commercial vehicle?
Many thanks Adele
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.

Hi Adele

Thanks for your question

As you will purcahse another vehicle as far as self employment is concerned you can claim expenses for travel in twp ways

1) Mileage method, which just allows you to claim 45p a mile (for the first 10,000 miles) and 25p amile thereafter for all business mileage (with the self employment) this just requires you to keep a record of all business milege undertaken

OR

2) The actual method, which allows you to claim a % of the running costs (fuel car tax, insurance etc) and also make the same % claim on the vehicle itself as a capital expense.

This would require you to keep a record of ALL mileage AND business mileage so a percentage attributable to business could be established. And then for the price of the vehicle (which does not have to be commercial) then you can claim the capital allowance rate which is then restricted to reflect the business element.

And if you purcahse with a bank loan then you can also claim the same % of the interest charged on the loan or leae arrangement.

Please do let me know if you need me to expand further

Thanks

Sam

Customer: replied 1 year ago.
Does it have to be a bank loan and not a car finance company loan?
Expert:  Sam replied 1 year ago.

Hi

No it can be either

Thanks

Sam