Contract hire for car

by **no8080** on Fri Feb 03, 2012 7:34 pm

Hi,

I am a one man limited company and I am thinking of getting a contract hire car again. In the past I have had a contract hire car and claimed 100% of it against Tax, as it was for business use only.

This time I am not sure if I can do this again. I have my own personal cars, but I do a lot of miles to temp places of work, meetings etc. So a business only hire car is a better way for me. So my question is, if I hire a car now in my business name, limit it to business use only can I claim 100% of the rental costs against tax? Or does this new 15% disallowance apply? As the car will certainly be over £12K and have CO2 over 161gkm.

Thanks

Neil

by **King_Maker** on Mon Feb 06, 2012 10:41 am

Are you considering long term or short term contract hire?

If the former, it is likely to be difficult/impossible to prevent a Benefit in Kind - even with a suitably restricted car insurance policy.

by **no8080** on Fri Feb 17, 2012 8:50 pm

I normally would have took a 24 month hire term, as any shorter works out too expensive per month for the car.

The daft thing is, if I used my private car and claim back the private mileage the cost to my company is higher than the cost of the monthly contract hire. As I do a lot of miles per month. I was doing 80K miles a year a few years back and I hired 2 cars at the same time with 30K per year policies and had to pay the mileage excess at the end of the term, as 1 contract hire car with above 40K per year is extremely expensive. It looks like I will be doing that mileage again and I don't want to put it on my private car, it would destroy the value and I get nothing back.

So I was thinking of getting another contract hire car, if my mileage starts going up high again then I would have to get a second car, whilst keeping my 2 private cars at the same time.

Neil

by **King_Maker** on Sat Feb 18, 2012 11:31 am

Claiming HMRC's mileage rates is a GOOD THING. It's Tax free and NI free income!

IMHO, your main problem is finding the right type of vehicle for the mileage you do.

Something like a 1-2 year old diesel with below average mileage which you change every quarter. That way the extra ~ 20,000 miles will not greatly affect its value and it's still within the warranty period for maintenance and re-sale.

by **Brandon97** on Sun Feb 26, 2012 8:36 pm

King_Maker wrote:Are you considering long term or short term contract hire?

If the former, it is likely to be difficult/impossible to prevent a Benefit in Kind - even with a suitably restricted car insurance policy.

Fantastic advice. Always nice to see someone who has come out the other side?
http://www.buy-auto.co.uk