The OP says that he is self employed, which normally means that he is not trading through a limited company. If that is the case, he will be able to claim 80% of running costs as a deductible expense, and a capital allowance based on the price of the car. It isn’t as simple as claiming 80% of the finance payment, I’m afraid.
What does it mean to be self employed in UK?
They are matters of opinion only. The OP says that he is self employed, which normally means that he is not trading through a limited company. If that is the case, he will be able to claim 80% of running costs as a deductible expense, and a capital allowance based on the price of the car.
What’s the special rate for a self employed car?
If the car has emissions over 160g per km it qualifies for the special rate (currently 10% but falls to 8% from April 2012). If the car has emissions between 110g and 160g per km it qualifies for the main pool rate (currently 20% but falls to 18% from April 2012). Because there is private use, the car would be treated separately from other assets.
How does capital allowance work for self employed?
The capital allowances you can claim are as follows:- This will carry on to you dispose of the vehicle. You would put any disposal proceeds against the Written Down Value (WDV) and claim a final allowance or pay a charge depending on whether the proceeds is higher or lower than the running WDV.
How to calculate car mileage for self employed?
Then at the end of each year when you draw up your accounts make an adjustment to reflect private mileage e.g. if your total costs are £1,000 per year and 20% of your mileage is private then write £200 to drawings to reflect this. Before deciding on which method to use you’ll need to do a bit of homework to workout which is best for you.
