Quick Question regarding my own personal car loan. I have a small car loan which we pay through our personal account (its actually my car), I use my car for 50% business and 50% personal, I don't do the fuel allowance as an accountant told me it would not be benifical as I hardly do any miles, so he said do it the other way and claim say 50% of MOT, Tax loan etc. But I can't remember whether he said I can only claim the interest on the loan or the actural repayments per month. Just want to make sure I get it correct when filling out my own personal SA. I have all the car loan statements so thats not a problem to work it out. Its not a huge loan anyway but nether the less I couldn't do my job without a car, I mainly work from home but do have clients that I see regurlary. Also I am right in saying that I do not claim for the fuel if I do it this way round. I don't use much anyway (have a diesel car).
Any help will be much appreciated. And yes I have left mine to the last minute as been really busy with clients recently, but my new years resolution this year is to do mine first!!
Many thanks
Amanda
-- Edited by Amanda on Saturday 16th of January 2010 01:35:23 PM
Also I am right in saying that I do not claim for the fuel if I do it this way round. I don't use much anyway (have a diesel car).
I would have thought (I don't actually know) from a logical poiint of view that you would claim the fuel (with whatever percentage of business miles to personal miles).
This brings up my own query - using the 40p per mile method allows for depreciation I believe - can you claim depreciation using the method described above, as this will occur because of the 50% of the time the car is being used for business use?
EDIT : Or is this not possible as it isn't actually a business asset?
-- Edited by Peasie on Saturday 16th of January 2010 02:59:44 PM
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Never buy black socks from a normal shop. They shaft you every time.
The "business" either owns the car in which case it pays all the bills and percentage is taken out for personal use, OR you own the car and charge 40 per business mile. You can't do a bit of each it's one or the other.
Not sure about the treatment of the loan.
-- Edited by semsley on Saturday 16th of January 2010 06:38:30 PM
The rule is that you charge 40p per mile for the first 10k miles and 25p per mile thereafter. The revenue will expect you to keep a log book showing every business mile done or none of it is allowable.
The mileage allowance is the compensation for use of your own car so really depreciation doesn't come into the equation.
If fuel is supplied for a company car then the calculation is based on the same Co2 omissions as the car benefit is calculated on.
The figure used for FA08 for fuel was £16,900 and (unlike the car) no reduction is given for any contributions made for private mileage.
As an example, imagine the situation where £3000 is spent on fuel and £1400 of that was for business mileage. Also imagine that the omission calculation works out to 25%.
The calculation does not take any division between business and private mileage into account but is simply calculated as £16,900 * 25% therefore the assessable benefit for £3000 spent on fuel would be £4225!
Happy to be told that I'm wrong but I only thought that you could go down the company fuel route if it was a company car? To my way of thinking Amanda does not have a company car so should be charging the 40p per mile for use of own car on business.
Talk later,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thanks for the replies, I think I got abit confused by orginal posting. I am going down the 40p per mile route, Shaun I only do a few miles so the 10,000 rule dosen't come into play, infact some of my clients are so local I walk. I have since found out this afternoon that the car loan dosen't matter either as I am going down the 40p per mile route.
I do keep a mileage sheet anyway so glad I am all sorted out now.
Hope you get better soon Sheila, read the post yesterday about the dog.
Basically a self-employed business can claim expenses 'wholly and exclusively incurred for the purposes of the trade'. However use of a private car partly for the business is known as 'dual purpose expenditure'. You can therefore claim on the basis of total business miles compared with total miles.
It is necessary to keep a very strict mileage record, and mileage from home to business premises is excluded (unless you run the business from home).
There are two possible methods of claiming. One is to keep all the details of expenses, including petrol, oil, maintenance, repairs, insurance, licence fees etc, and claim a proportion for the business. On top of that you can claim 'capital allowances' proportionately, which is a 25% allowance on the cost or value of the vehicle. I cannot see why a proportion of interest charges on purchase cannot also be claimed.
The alternative is to claim on the basis of mileage at a fixed rate per mile. Basically this is at a rate of 40p a mile up to 10,000 miles a year, and 25p thereafter. You cannot claim capital allowances on top of the fixed rate. There are also VAT implications, if your business is registered for VAT.
EDIT : Nothing like a similar situation, Peasie - but on the same subject. See what I mean about my english being useless.
-- Edited by Peasie on Saturday 16th of January 2010 07:29:30 PM
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Never buy black socks from a normal shop. They shaft you every time.
Unfortunately out of date information is worse than no information at all. This post was from 2003 when the tax treatment was somewhat different than it is today.
cheers,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I have always put through all motor expenses ie fuel, repairs, MOT etc etc and then on the SA disallowed say 20% (or whatever you feel right)? I do not claim for any loans that may have been on the car, as its my car being used for business purposes. This is for self employed and not ltd co.
