Driving instructor, car options advise.

[cyclopops]

As the topic states I am a driving instructor.

I am unsure what to do regarding next car, from a tax point of view.

So I want a car that is for example £20,000
If I lease it would be for example £350 per month, it can all go through the books, which is what I do now.

If I buy the car outright how do I put it through the books?

If I PCP the car again for £350 per month and either hand back or use as deposit for another, again how do I put this through the books?

(All figures are just examples and not nessasarily accurate)

Thanks in advance.

[pawncob]

If you buy it, you treat it as an asset and claim capital allowances on the cost.

http://www.hmrc.gov.uk/manuals/camanual/ca23510.htm

[cyclopops]

Am I right in thinking if I use PCP that I can like leasing put the whole amount I pay through the books?
Or can I only put through a % ?

[pawncob]

Depends on the exact wording of the contract.

[robbob]

Hello cyclops - i am presuming you are sole trader and not limit company

Am I right in thinking if I use PCP that I can like leasing put the whole amount I pay through the books?
Or can I only put through a % ?

Any claim made will should for business percentage use only - anything that is effectively commuting to workplace is likely to be deemed personal use.
Note the same restrictions apply if you buy

Also normal accounting principles apply if you are using normal method of calculating profits (I.e not simplified) - eg if you have prepaid 3 months leasing cost at year end then you would have to adjust for prepayment.

[cyclopops]

Hi Robbob,
You are correct in your assumption, I am a sole trader.
The car is mainly for tuition use, with the odd errand for food shopping (so limited personal use)
I obviously travel from home to my first customer and then home again at the end, but also between customers, so can be as much as 2 hours travel per day, are you saying I can't claim for this travel?

There will likely be a £2000 deposit if PCP.

Thanks so far for the replies everyone.

[cyclopops]

I am still unsure to what the answer is.

If I lease I know I can claim 100% of the cost of the lease fees

But I want to know if I use PCP can I also claim 100% of the fees? I don't intend to keep the car to full term.

[bd6759]

PCP is a purchase contract. You can only claim the interest.