I have been in paid employment (tax paid via PAYE). The last few years my salary was over £100,000 so I also submitted a self-assessment return.
I’m currently on furlough from my employer and looking to start my own side business as a sole trader. I’m looking to buy an electric (or PHEV) car that has CO2 emissions under 50g/km and therefore eligible for First Year Allowance.
I will not earn enough this tax year to write off the cost of the car under First Year Allowance. Can I offset this cost against my previous tax years and therefore get a tax refund.
Example: I paid £33,000 tax in 2019-2020 and a similar amount in 2018-2019. Due to being on furlough, my tax for 2020-2021 will be about £8,000. If I buy an electric car costing £45,000 and ignoring all other expenses, can I offset that against my PAYE income tax paid for 2020-2021, 2019-2020 and the year before that - which means I will get a tax refund back?
Thanks in advance
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