Contract, lease or buy

[sargefit]

Hiya guys I am just after a quick bit of advice (if there is such a thing). We have outgrown our car in so much as we need a bigger vehicle for weekend camping trips, I am self employed (Personal trainer) and am looking for the best way to get a new vehicle.

Which would be best, contract hire, lease or buy. I am not registered for VAT. The way I understand it is it would be best to get an LGV such as a crew cab pickup to be used as a car on weekends and work vehicle during the week, it would be our only vehicle so I am not keen on a single use van.

Also what are the tax breaks if any that I qualify for.

Many thanks for your help.

Mark

 

[MyAccountantOnline]

Hi Mark

If you have an accountant it would be really wise to sit down with them and get them to do the calculations. Its not really a quick thing to answer if you want the best advice.

In summary it very much depends on the Co2 emissions of the car you would like to acquire - have you any idea of the likely figure?

You arent restricted being self employed to any particular type of vehicle - the choice is yours.

 

[sargefit]

Thanks for the quick reply. CO2 emmisions are 252 g/km, it is a large pickup truck. Unforunately I dont have an accountant yet as I have a very simple business with no stock etc, no wages just me providing a service.

 

[MyAccountantOnline]

Thanks for the quick reply. CO2 emmisions are 252 g/km, it is a large pickup truck. Unforunately I dont have an accountant yet as I have a very simple business with no stock etc, no wages just me providing a service.

Might be a good idea to get an accountant now

If you were to buy the truck with Co2 emissions of 252 you can claim capital allowances of 20% - so you claim 20% of the total cost of the vehicle as an expense against your tax less an adjustment for private use. You can also claim all running costs etc less an adjustment for private use.

The allowances are on my website for other Co2 emissions - http://www.hjcca.co.uk/resources/tax_zone/tax_rates_and_allowances/tax_rates.php?r=24

If you lease a similar vehicle you can claim all the lease costs less 15% and all vehicle running costs again less an adjustment for private use.

An alternative is to just claim 40p per mile for all business trips for the first 10,000 miles and 25p per mile thereafter and not claim any lease costs, capital allowances and running costs.

The next stage is to really get some actual vehicle costs and some prices for a lease then do the calculations to see which works out best.

Dont just base your decision on tax alone though think of the advantages of leasing v buying etc.

Please feel free to PM me if you want any further help