Car purchase - partly self employed.

[dimke]

So, I was originally self-employed, but for the last couple of years I've had a salaried job, but kept the self-assessment as I do a little app development on the side and deduct my expenses like part of home utilities on a cash basis from the app revenue.
I will now purchase a car, and the main reason is because the app development requires some field testing of equipment, so I have to load them up in a car and go to some testing location. Since it is a regular car that will get some private use, I was looking into something similar to what I do for utilities - i.e. deduct part of the purchase price as an expense. However, it doesn't seem to work that way and, in fact, it is not clear on the HMRC website, but perhaps I can't do any deduction at all in this situation? If it makes any difference, we are talking about a £4k purchase total for the car.
TIA

[robbob]

Hello dimke

It is fairly straightforward (and also complex at the same time ) for method 1
method 2 is simples

Method 1

A simple private use apportionment is normally fine if you are using the actual method of claiming expenses, simply keep detailed log of business miles and total miles that car has done then reduce your claim(s) by the relevant private use percentage for the whole year. Your starting point should be listing all car expenses including any private use fuel.

Note claim will likely be car running / writing down allowance and interest on loan to buy the ca.

The complex bit is working out how to make the claim in the first place before you adjust for the private use.

Method 2 - simples

list business miles done and claim 45p per mile up to 10k miles reducing 25p per mile for each mile above 10k - you can also claim loan interest / hp interest subject to private use addback.

Note you must stick method 1 or method 2 whilst you have the same car.

hmrc could do with doing a nice 10 page flowchart to help bods claim in this regard - nice website challenge for anyone it or app literate would probably get quite a bit of use and simplify things - ah if only i knew someone who does apps for a living.

[dimke]

Thanks for the reply.
For the first method, I wasn't clear, you can only claim car running expenses and loan interest, so if you buy outright you can't claim something on purchase price? It will be a relatively inexpensive purchase £4-5k, so no loan.
And also did not understand what you mean by "working out to make the claim"

So, what would the app do? Help you choose between 1 & 2?

[robbob]

Hello dimke

Apologies for the lack of clarity in the previous post

Yes you do get allowances with regard to the cost price of the vehicle - its what i referred to as writing down allowance. This will probably be 8% or 18% per year reducing balance whats left - year 2 you claim 18% of 82% as you claimed 18% y1

https://www.gov.uk/capital-allowances/business-cars



ref the app - yes lots of little relevant bits with regard to car claims and an app could give comparison of how much tax would be saved and how calcs work and ideally keep bods on straight and narrow - if a full q&a was done to ensure nothing missed or claimed for in error.