I am a contractor sole trader self assessing and it's time to replace my current vehicle.
The simplest way to do it is to just claim milage @45p a mile but unfortunately I don't business use the car much milage-wise (maybe 3k per annum) as my core work is overseas where a vehicle is provided.
I do however believe I use the car for, say 20% business use overall (drop-offs, business errands, meetings ) as I average 15k a year.
I know BIK etc does not apply as there is no separation between myself and my business and VAT is not a factor.
So if I got a £25k low emissions car for cash (new or second hand) wouldn't I be better off claiming actual costs of 5k (20% cost) plus associated road tax / insurance / services etc? Or do I just get tax relief off the 5k whilst the 45p a mile is fully allowed? To date I have just been claiming the milage rate on the old car but I'm finding it difficult to weigh up the pros\cons when considering replacement. Has anybody been in a similar position?
The simplest way to do it is to just claim milage @45p a mile but unfortunately I don't business use the car much milage-wise (maybe 3k per annum) as my core work is overseas where a vehicle is provided.
I do however believe I use the car for, say 20% business use overall (drop-offs, business errands, meetings ) as I average 15k a year.
I know BIK etc does not apply as there is no separation between myself and my business and VAT is not a factor.
So if I got a £25k low emissions car for cash (new or second hand) wouldn't I be better off claiming actual costs of 5k (20% cost) plus associated road tax / insurance / services etc? Or do I just get tax relief off the 5k whilst the 45p a mile is fully allowed? To date I have just been claiming the milage rate on the old car but I'm finding it difficult to weigh up the pros\cons when considering replacement. Has anybody been in a similar position?
Comment