Leasing a car help - tax /vat/expenses

[jujojones]

Hope you can help!

I have search, but cant seem to find anything relevant!

We are in need of new cars - these will be used solely for business use.

We have been advised to lease, as this will be offset against our tax at the end of the year.

This sounds too good to be true - im finding all the info in the web very confusing!

The company is vat registered with an expected turn over off 300, 000 ?

IS this classed as an expense? would office space be an expense? anyone able to explain in layman's terms would be fantastic!

 

[Scalloway]

Any expense that is for your business is tax deductible, with a few small exceptions. Some info here

http://www.hmrc.gov.uk/incometax/relief-self-emp.htm

You do not say whether you trade as self employed, partnership or limited company. This will have a bearing on how leasing a car it affects your tax.

 

[jujojones]

Any expense that is for your business is tax deductible, with a few small exceptions. Some info here


You do not say whether you trade as self employed, partnership or limited company. This will have a bearing on how leasing a car it affects your tax.

Sorry - The company is a limited company

 

[Scalloway]

The next question then is what is the business use?

 

[David Griffiths]

I think that the next question would be "where will the cars be kept?"

At the business premises?

At the homes of one of the directors?

 

[jujojones]

I think that the next question would be "where will the cars be kept?"

At the business premises?

At the homes of one of the directors?

At the moment the business address is the home address! The directors work in construction so have an office at home and work on various sites

 

[David Griffiths]

At the moment the business address is the home address! The directors work in construction so have an office at home and work on various sites

In that case HMRC will not accept that there is no benefit in kind on the directors. Read the definition of a pool car

A car only qualifies as a pool car if all the following conditions are satisfied:
(a) it is available to, and actually used by, more than one employee
(b) it is made available, in the case of each of those employees, by reason of their employment
(c) it is not ordinarily used by one of them to the exclusion of the others
(d) any private use by an employee is merely incidental to their business use of it, and
(e) it is not normally kept overnight on or near the residence of any of the employees unless itis kept on premises occupied by the provider of the car.

 

[Billmccallum]

Typically, construction works require vans or heavier vehicles, not cars.

I would suggest that cars would be more of a status symbol in a construction business.

If a vehicle is needed for teams to travel, then a crewbus or van would crewcab would be best.

 

[jujojones]

Typically, construction works require vans or heavier vehicles, not cars.

I would suggest that cars would be more of a status symbol in a construction business.

If a vehicle is needed for teams to travel, then a crewbus or van would crewcab would be best.

Thank you for the advice, they do own vans - but are used by employees due to the directors having to travel quite a distance to sites - the are currently using there own personal cars for this use. They are planning on leasing Citroens or focus - not sure that to great for any status symbol lol - maybe they should go for audis if thats what there after

 

[jujojones]

In that case HMRC will not accept that there is no benefit in kind on the directors. Read the definition of a pool car

Thank you!

 

[April08]

I just wanted to add to this thread with a further question - I am new and not sure if I should start new thread or if it is okay to ask here so apologies if I am butting in!

I am a sole trader just about to go Ltd. I am also VAT registered working from home. I currently own a car outright and as far as I know, I don't put a great deal of the costs for it through the business (my accountant does it for me - and yes I have queried this with him but not always easiest to understand his feedback to be honest and he hasn't got back to me yet!).

Basically looking for a new car. I do use the car for work purposes but to be honest, not a great deal at present.

I am weighing up pro's and con's of leasing a Mini One Convertible (133g/km) and am confused about how much of the cost of this I can put through as a business expense. Even if I use the car for personal use most of the time would I still be able to claim 85% of the costs as a business expense or will I have to only claim the percentage that I would estimate that I currently use the car for and if so how do I work this out and how does the taxman check?

I share another car with my partner. Would it be feasible to just be, for tax purposes, using my car for work purposes and our shared car for personal use?

Just confused by the whole thing!

The other option is for me to get a finance deal which has lower monthly payments than a lease but could I claim as much back for work use?

Anyone who knows more about this that I do - I would greatly appreciate your help!

Thanks.