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Company Car Tax for a Sole Trader

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dflongmuir

Free Member
Apr 29, 2010
22
1
Glasgow
If I am a sole trader and wanted to purchase a new vehicle and run all business costs through my accounts ex personal fuel etc, as such would I pay company car tax?

The reason that I ask is that the car is relatively High Emmissions and P11d and I currently claim Mileage only eg 40/25p.

Any help is much appreciated as always!
 
You will need to apportion the cost of the vehicle between business and private use with reference to your mileage log.

Your accountant should be able to assist you with this.
 
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Thanks for this response.

Aside from the apportioning the personal use of the vehicle, does the P11d and Emmissions affect the tax that I pay as a sole trader?
 
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dflongmuir said:
If I am a sole trader and wanted to purchase a new vehicle and run all business costs through my accounts ex personal fuel etc, as such would I pay company car tax?

The reason that I ask is that the car is relatively High Emmissions and P11d and I currently claim Mileage only eg 40/25p.

Any help is much appreciated as always!
Click to expand...

If you are a Sole Trader you will not pay company car tax. If you provide a car for an employee they would pay company car tax, and if you ever go Ltd then you would be liable to pay company car tax, but as a Sole Trader you do not have to pay this.

You can still take advantage of the tax savings by financing the vehicle through your company.
 
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dflongmuir said:
Thanks for this response.

Aside from the apportioning the personal use of the vehicle, does the P11d and Emmissions affect the tax that I pay as a sole trader?
Click to expand...

You do not produce a P11d as a sole trader, the portion of the total cost of the vehicle used on business will be fully allowable as an expense, the portion of cost for private use will not be allowable...and that's about it.
 
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Thanks for the advice...it is very much appreciated.

If the funding was in my personal name ie a personal PCP agreement and the vehicle was say 85-90% business use. would I run this as an company asset through my accounts, depreciating it in the normal way or simply apportion the 85-90% of the monthly payment, deposit, fuel and repairs etc.

I will be using an accountant for my end of year but I just want to understand how it works before I commit to the car.
 
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dflongmuir said:
I will be using an accountant for my end of year but I just want to understand how it works before I commit to the car.
Click to expand...

If youre accountant is any good they should not have a problem putting together a few calculations for you - be it year end or not.

As mentioned above, the options for a sole trader when it comes to cars/tax are pretty limited. However, for future reference this website is useful for working out the taxable benefit of pretty much any car you can think of.

http://www.comcar.co.uk/


P.S. There's a BMW with low emissions that looks pretty nice.
 
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robindunne said:
If youre accountant is any good they should not have a problem putting together a few calculations for you - be it year end or not.

As mentioned above, the options for a sole trader when it comes to cars/tax are pretty limited. However, for future reference this website is useful for working out the taxable benefit of pretty much any car you can think of.

http://www.comcar.co.uk/


P.S. There's a BMW with low emissions that looks pretty nice.
Click to expand...

Would it be more useful to the OP if you posted a linke to something like soletradercar,co,uk? :)
 
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dflongmuir said:
Thanks for the advice...it is very much appreciated.

If the funding was in my personal name ie a personal PCP agreement and the vehicle was say 85-90% business use. would I run this as an company asset through my accounts, depreciating it in the normal way or simply apportion the 85-90% of the monthly payment, deposit, fuel and repairs etc.

I will be using an accountant for my end of year but I just want to understand how it works before I commit to the car.
Click to expand...

As a soletrader running a car through your business is much easier than a limited company - you just claim for tax purposes a proportion of the running costs and capital allowances that relate to your business use.

Bear in mind for VAT its a bit different though, if you are VAT registered.
 
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Just to add you can, depending on your turnover, claim 40p per mile for the first 10,000 miles pa and 25p per mile thereafter rather than actual motoring costs/capital allowances.

It can work out better ie save more tax if you dont do a huge mileage or have a car that is quite economic to run.
 
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