Claiming a leased car as a business expense....

[Ritchiec80]

I'm looking at leasing a car through my business as I am a wedding photographer and need something that I can transport clients in when necessary and use to transport stock. I am a sole trader and not VAT registered so after speaking the the garage it looks like a personal contract plan might be a better option than the business contract plan. Oh at the moment I track and claim millage.

So....

1. Can I claim any of the monthly payments over the 4 years back as an expense?

2. If so how much?

3. If I went down this route are there any other drawbacks and what else could I claim for? Tax or insurance? Petrol with a receipt?

Thanks in advance.

 

[Adam93]

1. No (you have claimed business mileage, you can't claim both)

2. N/A

3. You can only change method from business mileage to actual cost when you change vehicle.

You could use the actual basis of expenses when you lease a new car. You will have to disallow a proportion of the private use however. The best way to ensure that the proportion disallowed is accurate, would be to keep a mileage log of all journeys and split the costs based on that - the people that actually do this are few and far between from experience.

Expenses would include insurance, fuel, repairs, lease costs (depending on the type of lease) road tax. As above, adjusted for personal (non-business) use.

 

[Gordon - Commercial Finance]

I would say that the garage are trying to steer you away from a lease, and on to PCP, which is better for them and worse for you. Especially at dealer rates and residuals.
Do you want a lease, or do you want to buy the vehicle?

Presuming you don't have business premises and thus would be keeping the car at your home, that makes it available for personal use, and so if you bought it through the business the tax situation could get very complex and expensive. Generally buying in personal name and then claiming business mileage is always going to be the best option.

 

[MyAccountantOnline]

.... if you bought it through the business the tax situation could get very complex and expensive. Generally buying in personal name and then claiming business mileage is always going to be the best option.

I think you may have missed that the OP said he was self employed not operating his business via a limited company.

 

[Gordon - Commercial Finance]

I think you may have missed that the OP said he was self employed not operating his business via a limited company.

You're right Nicola - apologies.

Advice still stands - don't go with dealer PCP rates!

 

[MyAccountantOnline]

I'm looking at leasing a car through my business as I am a wedding photographer and need something that I can transport clients in when necessary and use to transport stock. I am a sole trader and not VAT registered so after speaking the the garage it looks like a personal contract plan might be a better option than the business contract plan. Oh at the moment I track and claim millage.

So....

1. Can I claim any of the monthly payments over the 4 years back as an expense?

2. If so how much?

3. If I went down this route are there any other drawbacks and what else could I claim for? Tax or insurance? Petrol with a receipt?

Thanks in advance.

@Ritchiec80 basically you have 2 options in various forms, you either buy or hire a car, and what you need to do is calculate how much each is going to cost you, and then consider the tax saving.

Broadly if you buy a car you can claim a proportion of the cost and the running costs as a business expense including any interest on the finance payments. If you lease a car you can claim a proportion of the lease costs and all of the running costs.

 

[MyAccountantOnline]

You also have the option of using simplified expenses for motor expenses which is worth considering. Its explained here https://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles-

 

[Ritchiec80]

Thanks for your comments everyone....

Basically the car is in my name and it is a PCP @ around £200 per month....

I just wondered if I could claim any of this as a business expense (and what else) with being self employed rather than a Limited Company.....

or am I better off and I'm sure it's certainly much easier to just claim milage....

I have a couple of weeks to decide as the car isn't due in until the end of March....

 

[MyAccountantOnline]

....
..am I better off and I'm sure it's certainly much easier to just claim milage....

....

No one can answer that for you without a lot more information.

You need to do some calculations taking into account PCP and other options and see which is the best cost saving, and then to look at which is best for tax do some calculations using your estimated business mileage/the proportion of your mileage which is for business.

 

[Ritchiec80]

No one can answer that for you without a lot more information.

You need to do some calculations taking into account PCP and other options and see which is the best cost saving, and then to look at which is best for tax do some calculations using your estimated business mileage/the proportion of your mileage which is for business.

Thanks, if I decided to take the claiming for the car at a rate of 50% of each monthly PCP payment option, can I also claim 50% of car tax, insurance and petrol costs via receipts?

Sorry for all the questions I've always just claimed milage but have been unsure if I can legally claim on the payments and other costs of the car.

 

[Scalloway]

can I also claim 50% of car tax, insurance and petrol costs via receipts?

You can claim the business proportion of those costs whether that be 90% or 10%. 50% just applies to leasing costs.