Better to buy or lease car as sole trader?
My client, a self employed sports coach, intends to purchase a car for use in his business. Business use will be approximately 80%.
He wishes to know whether it will be more advantageous from a tax point of view to buy or lease a car.
If he buys the car outright (expected purchase price £6,000) then this will be included in the main pool for writing down allowances at 20% (as the emissions are < 160g/km). The vehicle will be written down by £1200 in the first year, with the allowance restricted to 80% of this value (£960) because of the private use.
If he leases the car, I understand that the amount he can claim as a business expense of the lease cost depends on the emissions of the car, and as long as the emissions are < 160g/km, then the full lease cost (less private use adjustment) can be claimed as a business expense.
He can also claim the fuel costs and maintenance costs (less adjustment for private use) with both options, although I presume there would be less maintenance involved with a lease car if this is included in the lease arrangement.
Am I missing anything important? It is tricky to directly compare the two options as a lease would be of a newer vehicle than the one my client has funds available to purchase, but my client is keen to understand the tax implications of his decision.
- Nominal Code for Car lease? 150 7
- Put fees on website 164 5
- s75 ICTA88 Management expenses - idiots guide 1,440 27
- Director resignation 114 3
- Can't find a good web address 80 1
- effective advertising 103 2
- Mobile phone and P11D 1,231 4
- I'm thinking of moving to Ireland 228 3
- Sigma Red 1,351 3
- CIS Software Recommendations 335 5
- VAT on medical/care services? 74 2
- Definition of "relative" in benefits code 155 2
- Live Chat on Accountancy Website 435 6
- Should we let the Client Call the Shots? 469 7
- VAT Variation Team 189 3
- Cloud Based Software recommendations please 90 1
- Sage help please 299 4
- charges for storing documents 194 1
- Share scheme annual returns problem 86 1
- VAT in Eu 76 1
- Straight line write off of Purchase Goodwill ??? 475
- Has anyone been affected by the RBS payment breakdown? 457
- WIP Software 331
- No payroll scheme in place 282
- Is there anything wrong with this? 254
- Do subcontractors on work for residential (student accomodation) construction 245
- Small Part Disposal of Property 225
- Uncommercial property business 216
- Apple Employees - RSU vesting and tax witheld 187
- SA Penalty 179