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Expensing a car in UK

Discussion in 'Business & Tax Advice' started by DanDanger, Feb 25, 2014.

  1. DanDanger

    DanDanger Junior Member

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    How could one expense the full cost of a car?

    If you're in the UK you may know that you cannot technically expense the full cost of a car, even if its a car purchased under a LTD. You can only expense part of it each year.


    But.... what if one bought a car as "research" and "unique content" for a micro niche site about that particular car.


    I would imagine the conversation going like this:

    HMRC: You tried to expense your new car! We caught you!
    IMer: Yes. I needed it for research and unique content for my micro niche site. It was a new business venture.
    HMRC: Nice try. You are in big trouble.
    IMer: Did you tax me on the 30p I made from the micro niche site?
    HMRC: Yes. Of course.
    IMer: Exactly. So I will expense the £10,000 investment it cost me to make that 30p.


    Your thoughts?
     
  2. IamNRE

    IamNRE Jr. VIP Jr. VIP Premium Member

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  3. Execute

    Execute Supreme Member

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    This is all just hypothetical as I am not 100% sure what they would do, but with cars and other items that can be used for business as well and personal use they split the ratios and then work out the tax relating the business portion. Such as 50% business use and 50% personal use.

    Unless you only drove the car on a specific allotted time frame, something like Top Gear and Fifth Gear and left the vehicle at the place of work, like people that don't use their own vehicles, e.g. some delivery men, I don't think you could prove that it was a 100% business expense.

    If you plan to use the car for your own use then that will have to be added into the equation or that could be pulled up on when you file your taxes.

    Many people put cars as an expense through their businesses but just apportion it out depedning how much they use it personally. Wonder if there are any other potential ideas but I think claiming a car as a 100% business expense has been trial and tested by thousands of people and it is quite a regulated area.

    There are other ways to get money out such as charging the business for travelling miles at 45p a mile etc but remember, if the business buys a car you may have to pay tax on the car purchase as well, depending on the CO(2) output etc. Then if you get to use the car from your business it could be seen as a benefit in kind which may hit your tax levels and at £10k it could even completely remove your tax free allowance.

    Tax is a minefield once you start looking deeper into specific areas, they are just masters of grabbing as much money as possible.
     
  4. rathat

    rathat Newbie

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    my interest buy a costliest car in the world that might be nice for me.
     
  5. Apricot

    Apricot Administrator Staff Member Moderator

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    A dangerous game to play.
     
  6. kasher9

    kasher9 Jr. VIP Jr. VIP

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    If its r&d, theres a lot of blurred lines, youre technically right in saying that if you buy it for the purpose in research and you make that 10p, and declare it, you then can dispose of the cost as expense. But when you make a website to solely research the car the lines become even more blurry. There was a similar case with a guy at my ex job putting his server costs down as research as he was trying to start up a new cryptocurrency, as far as I remember tax man said no purely because the servers were too much for the cause. I think the same would apply to you. The way id put a car down is by declaring that you need to meet clients regularly with receipts provided, helps inflate your assets a bit as well. But as you said only part of the cost can be covered