Car lease for a sole trader

[mordenboy]

Hi all,

I was hoping for some advice regarding what I can claim when leasing a car, as this seems the most efficient option for me.

I am a sole trader, my business is specialist teaching for university students with learning difficulties and disabilities. I use my guest room as an office and spend my days travelling to meet clients.

My business use of my vehicle is around 90%, so for the sake of keeping the numbers easy, if the lease was £100 a month, I can claim £90 of that? So if my monthly tax was £200, i'd end up paying £110? Is this correct?

Also, can I claim the deposit/up front payment? If the contract involves maintainance, can this be claimed?

Is 160 still the magic number for carbon emmisions?

Many thanks in advance.

 

[Lease4Less]

Assuming you are talking about a Business Contract Hire, then you claim up to 100% tax relief on the rental on cars with a co2 of 160 or below. This is however changing in April next year to 130 but shouldn't be back dated.

Yes the initial rental forms part of the contract and is also subject to tax relief.

All of the maintenance element is tax deductable.

Are you Vat registered? If so then 50% of the Vat you pay per month is reclaimable and the other 50% is tax deductable.

100% of the Vat of the maintenance element is tax deductable.

 

[mordenboy]

Thank you for your reply.

Im not sure how it would work, whether to get a business lease or a personal lease as i'm not VAT registered?

When the CO2 limit changes, I can claim the payments minus % reduction?

 

[Lease4Less]

It has not been clarified yet but I believe that any contract set live prior to April 2013 will not be subject to the changes.

After this any vehicle with a co2 of 131 and above you will claim 85% of the rental.

You will not pay any company car tax being a Sole Trader, and as you can claim tax relief on the vehicle it will be more beneficial to take the vehicle as a Business Contract Hire.

 

[mordenboy]

Thats great thankyou.

One last thing, in addition to the lease payments, am i right in thinking you can claim either claim all costs like fuel, insurance, MOT etc OR 40/25p a mile and this is designed to include all of the cost of motoring.

I've just visited your website after the help given, so i'll give you a call in the near future to organise the lease.

Jake