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Sole trader - 2nd car

Sole trader has 20% business use on car [mini]....and claims accordingly. 

Wants to buy a 2nd car [Audi] 'for business use only' and claim 100% on it.

The business mileage claimed will be the same, but obviously the amount claimed will be higher [both because it's 100%, but also because the new car is more expensive].

What are the issues that might arise here??


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If he keeps a rliable mileage log

that is backed up by diary entries confirming the business trips, then in theory it could lead to an increased deduction - but does he really want an expensive car sat on the drive/forecourt doing nothing but a few business miles.

So far as the suggestion goes consider a "real world" example of a GP who has a small car to run around in for home visits & the like, plus a people carrier that gets used for business on occasion but is more usually used for the school run & family holiday. In that case it should be a fairly simple task to back up a high business use claim for the small car and a low claim for the occasional use of the family car.

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But how will the taxman know which miles have been done for what purpose in which car??

So.... business miles last year - 3000 out of 15000 in small car

Buy nice car and do only 3000 miles in total...claim 100% as business. Do 12000 in small car and make no claim for % as business.



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You/he will need to maintain evidence to support the claim

sufficiently robust to stand up to scrutiny on an enquiry.

Individual mileage logs for the two carsLists of business trips and claims that can be confirmed to the business diary maintained for the business trips

You/he are going to need to be able to prove to the Inspector that the "prestige" car is used virtually exclusively for business and the runaround for private mileage.

Does that stack up to personal circumstances. The more evidence that can be amassed to prove the claim the better. Take a photo of the car at the client premises if you think it will help

The example that I gave, which is perhaps the reverse of what you might have can be matched to circumstances, ie a small runaround that probably does few miles as it only travels around the surgery cachment but virtually exclusively on business journeys compared to a people carrier that does a lot more miles on the school/shop runs and to the West Country / South of France on the family holiday but negligible on business.

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have you considered the pooling arrangements that apply to high emmission cars with no private use, in particular when you come to replace it?

You might want to have a rethink..


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The basic problem that I can see is if HMRC ask him to....................PROVE IT!

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Capital Allowances

Isn't there a possible problem with capital allowances since with no deduction for private use  when sold the car would remain in a pool and no balancing charge would arise?

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Cap allow...

surely the way around that is 1% private/99% business split??

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Is it better to claim mileage allowance if business use is small proportion?

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I thinks, it is really better to claim mileage allowance if business use is small proportion. which will help to buy a car even it is expensive or Buy nice car and do only 3000 miles in total...claim 100% as business.

Audi A4 Review

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