I have a client who is looking to purchase a company car and i would like to get your take on things.
I don't think the HMRC will allow a soletrader to purchase a company car especially when the soletrader already has a company van and is not in the distribution/taxi or transport business.
I am going to be replying to the client informing him that the HMRC will not allow this and that he can personally purchase the car and charge mileage for business use proportion at 45p for the first 10,000 miles.
If a sole trader then where does the "company" come into matters?
If a sole trader and is using for business purposes then the car can only be held in own name. If a company is providing them with use of a car why are they doing this if they are not an employee? Surely there would be benefit in kind implication on the company?
Anyway, if a sole trader owns a car in their own name there is two ways can be treated:
1.Claim business mileage at 45p per mile for first 10k miles and 25p per mile above 10k miles.
2. Claim for all cost of the car eg petrol, insurance, MOT, road tax, servicing/repairs etc then disallow % used for personal purposes.
Apologies, its a soletrader looking to purchase a car for the business.
Being brutally honest, i cant see the car being used much for business mileage as the client already as a company car and putting myself in the HMRC's shoes it is very questionable.
I do agree on what MarkS say's, and if I was an inspector, then my question would be, " Why do you need another company car when you already have one"?
I don't really understand this one. If your client does 10,000 business miles in a year in one car he can claim 10,000 X 45p. If he does the same over 2 cars he can claim the same. If he drives a total of 30,000 miles per year he can claim a third of his motoring costs. Just because he has 2 cars are you suggesting he'll do twice the miles and claim twice as much?
Personally, I cant see an issue, and I doubt HMRC would. I sometimes use my car and sometimes use my partners, I still claim my mileage.
