I was wondering if anyone has encountered the following or could offer advice :
My client (a sole trader) has purchased a new car, which is used daily for his business.
He is making the payments for the vehicle, insurance, and repairs etc. however the finance agreement is in his wife's name (as she had a better credit rating)
Is it possible for him to claim Capital Allowances for the car ?
Never came up against this one, can anyone please advise?
Thanks
Stephen
-- Edited by Stevie2929 on Friday 25th of May 2018 10:07:25 AM
Have you run the figures to see if claiming the mileage rate would not be more beneficial, I have rarely seen it better to claim CA and actual expenses on a car after personal usage has been taken into consideration, bearing in mind you can only claim CA for either 8% or 18% on WDA per year.
As far as claiming CA my understanding is that they can only be claimed on an asset used in the business and for it to be a business asset I would have thought that it would have to be owned by the Sole Trader, seeing as you say that the finance agreement is in his wife's name I would want to know what sort of agreement it was, if your client is the registered owner of the car and if he is the only person who uses it, do all of the payments for the vehicle come out of his bank account.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
I have actually been looking through HMRC Agents Toolkits regarding this and basically came to the same conclusion, the asset must be owned by the person wishing to claim the allowance, just as you said. What thew me was the client was making all the payments on HP, Insurance, Fuel etc. although the finance agreement & V5 was in his wife's name.
Thanks for confirming this, I can now get the return finished and hopefully enjoy whats left of the sunshine.....