I am self employed, I work from a home office and do not employ anyone
I own a car which I use for work/home use and currently claim 40p a
mile to see clients.
I would like to buy a new car, but can't seem to find any info on the
gov tax site about claiming anything back for tax purposes.
I understand that I can either claim the 40p a mile OR part of the car
insurance/tax/servicing etc, but still no mention of claiming all or
part of the car cost.
Thanks in advance.
The mileage allowance is deemed to include an element for depreciation,
and therefore you cannot claim part of the cost of providing the car
if you use the 40p a mile method. You can only do this if you claim
on the actual costs basis (the "OR" part of your last paragraph above).
You would then claim capital allowances. Basically each year you can
claim 25% (or £3000 if smaller) of the acquisition cost of the car on a
reducing balance basis (claim 25% in year 1, then 25% of the rest in
year 2, etc). Both these capital allowances and the running costs would
of course be apportioned on the ratio of business miles to total miles
in each year.
Irrespective of which of the two methods you use, you can also claim
the (business proportion of the) interest on any loan taken to buy
If you wish, you can change from the 40p method to the actual costs
method, or back again, but you can only do so when you change the
car. Once you've used one method for a particular car, you're stuck
with that method for as long as you keep the car.