Can I claim Capital Allowance on a car purchased for business use?

Question

Hello, I am opening a small business, and rather than tie myslef into three years for a vehicle leasing contract, I am waitin until i have about 5k saved and then purchase a car for general purpose use.

My questions are:
1) Can I claim VAT back from the purchase price
2) Can I claim the depreciation as a capital purchase in the same way I do machinary?

Thanks in advance

Answer 1

1) The simple answer is no. That's not strictly true as it is possible to claim VAT back if the car is bought solely for business use. This criterion is quite strict. It usually means that it must only be insured for business use and you will have to convince HMRC that it is not used for any private mileage. The only businesses I know that claim this are vehicle leasing companies and private chauffeur hire companies.

2) Yes, capital allowances are available but note that unless the car qualifies as in (1) then first year allowance will not be available. You just get the 25% writing down allowance subject to the overriding maximum. As already mentioned you must reduce the claim by the proportion of private miles to total miles.

Answer 2

yes you can. if the car cost more than £12,000 then the maximum you can claim is £3,000 (until the written down value is below £12,000 and then following the same rules as other cars) otherwise it is 25% on all cars (not necessarily vehicles)

also note that this should be apportioned to take account of any personal use (i.e. you only get 50% of the CA if you use your car for 50% personal use) - driving to and from work is personal use.

this personal use will then be a taxable benefit for your p11d.

Answer 3

Prestigious - yeah correct - if that lands on my table it receives rejected. once you've a actual organisation want for good haulage get a van. you are able to ought to communicate over with HMRC - a technician. Capital merchandise - depreciation - complicated - communicate over with an accountant or an HMRC tech.

Answer 4

Yes you can you can claim back your expenses when you do your tax form each April