Sole trade and vehicle leasing

Sole trade and vehicle leasing

Didn't find your answer?

Could someone please clarify something for me. If a sole trader leases a car (not least purchase but straight forward rental so no balance sheet capitalisation) that is a higher Co2 vehicle and uses it for business and private use, how do I deal with the restriction in the tax comp? Do I just disallow the personal usage % or so indeed to make some adjustment for the 15% leasing restriction too? If so, how do the two interact?
Is it the same for a parter in a partnerships/llp?

Replies (9)

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By Crouchy
25th Jan 2015 09:40

had the same issue last week - guidance from a HMRC techinical advisor

disallow 15% of the lease only

disallow pte use of other motor costs - fuel, insurance etc

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By Newbee Learner
25th Jan 2015 11:32

thank you
Thank you, seems odd but if that is what they say....

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RLI
By lionofludesch
25th Jan 2015 12:59

Yes

It is weird, I agree, but they make the rules.

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Replying to Wilson Philips:
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By User deleted
26th Jan 2015 16:01

Do they?

lionofludesch wrote:

but they make the rules.

 

Do they?

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By Wanderer
25th Jan 2015 15:40

Above appears to be in conflict with this:-

https://www.accountingweb.co.uk/anyanswers/question/better-buy-or-lease-...

4) Lease rentals are subject to a private use deduction and consequently the finance cost implicit within the rentals is not deductible against tax in full.

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Replying to Joe Alderson:
RLI
By lionofludesch
26th Jan 2015 15:55

85%

Wanderer wrote:

Above appears to be in conflict with this:-

https://www.accountingweb.co.uk/anyanswers/question/better-buy-or-lease-...

4) Lease rentals are subject to a private use deduction and consequently the finance cost implicit within the rentals is not deductible against tax in full.

That's right.  Only 85% is deductible.

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Replying to Wilson Philips:
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By Wanderer
26th Jan 2015 17:48

Mixing matters?

lionofludesch wrote:

Wanderer wrote:

Above appears to be in conflict with this:-

https://www.accountingweb.co.uk/anyanswers/question/better-buy-or-lease-...

4) Lease rentals are subject to a private use deduction and consequently the finance cost implicit within the rentals is not deductible against tax in full.

That's right.  Only 85% is deductible.

The 15% isn't the private use deduction!

I'm with Portia on this one.

 

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By Newbee Learner
25th Jan 2015 16:48

So
How do you deal with both in a tax comp? It would seem and element of double add back?

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Portia profile image
By Portia Nina Levin
26th Apr 2015 10:39

(No subject)

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