Car allowance

There are two options:

1) You can treat the vehicle (car?) as if it is "yours" as opposed to the business's and (by concession because you are a very small trader) claim this statutory mileage allowance as if you are an Employee:

You need to keep a detailed log of all business trips: Date, start mileage, finish mileage, reason for journey etc.

The mileage allowance can then be claimed as Motor Expenses in the business accounts.

2) Assuming you can show the car is *truly* business only (it is signwritten or is a beaten up old banger clearly used only for carrying decorator's stuff around etc) you can claim the *whole* cost of buying and running the car.

The purchase cost is capital. In your accounts you will depreciate it over its useful life, for tax purposes apply Capital Allowances.

All other Expenditure: Petrol, Insurance, RFL, Repairs are allowable to be set against your taxable income as Motor Expenses.

You don't have to decide which method to use until you prepare your accounts so keep your log and retain your bills and see which is most beneficial.

A longer discussion here:

And (doesn't apply to you but) the rules on people who take their vans home from work are changing:

I am in the same position and have always claimed ALL vehicle expenses (several cars/vans) less 10 percent personal use. this has never been argued with. so claiming everything for one vehicle should be no problem

mrcheerful

This is a very common dodge amongst wealthy doctors and consultants, the Lamborghini, the Roller, the Mercedes and the People Carrier all have 75% business use. Unless there is *truly* 90% business use in each vehicle you should prepare to be pegged back to all the vans but only one of the cars.

Do you claim 90% Capital Allowances on them as the doctors do? "This has never been argued with" might just translate as "nobody's ever noticed". Cross-posted to ukba to see if Simon has a definitive ruling.