FYA on Electric car bought in husband's name

New electric car bought is not in client's name

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Hello

My client is self employed and, together with her husband (who isn't self employed) , have just bought a brand new electric car for £40k. She uses the car in her business and we usually claim 75% business use.

Claiming 100% fya (or waiving part & then claiming WDAs) will wipe out her taxable profits completely but the car purchase invoice she sent to me just shows her husband's name. She is on the insurance and definitely uses it for business, but, due to the size of the claim we'd make, I'm a bit nervous that her name is not on the purchase invoice. I've trawled through the HMRC guidance but can't seem to find any clarification on this.

I'm probably being over cautious, but would like to check before claiming. Any help would be appreciated.

Thank you in advance.

Replies (9)

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By Capitalised
31st Jan 2024 09:26

I would be concerned about that. It sounds as if this is her husband's car and not hers? In that case she hasn't "incurred" capital expenditure for her business. What evidence does she have that this is her car?

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Replying to Capitalised:
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By Chessaccountant
31st Jan 2024 10:32

I agree. Whose name is on the V5? I expect it will be the husband's.

By all means he can loan her the car for business use, but I cannot see any way for her to claim the capital allowances. It is not her asset and it is not her expense.

Claiming mileage is probably the safest way to reduce the tax liability, assuming she keeps a mileage log and other evidence of the journey and that it was wholly and necessarily in the course of business.

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By FactChecker
31st Jan 2024 14:08

I gulped when I first read "My client is self employed and, together with her husband (who isn't self employed) , have just bought a brand new electric car" ... and tried again.
But nope, I can't work out from that sentence who actually purchased the car.

And then continuing, the only other pertinent info ("the car purchase invoice she sent to me just shows her husband's name") seems to provide the answer ... just not the one your client wants to hear.
Facts such as "She is on the insurance and definitely uses it for business" are wholly irrelevant to who purchased it.

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By Jane Wanless
31st Jan 2024 17:12

From the DVLA website :
The Differences Between The Registered Keeper And Owner Of A Vehicle
The registered keeper is different to the owner of a vehicle. The registered keeper should be the person who is using the vehicle and keeping it, which can sometimes be different to the owner of the vehicle or the person who is responsible for paying for it.

The person who is responsible for the vehicle in terms of official communications from the police and the DVLA is known as the registered keeper, but the owner is the person who has paid for the car or was given it as a present.

The DVLA emphasizes that the person who is named on the registration document, which is sometimes also known as a V5 document, may not necessarily be the owner and that a V5 is not proof of ownership.

For example, this is the case with a company car. The car is owned by the company, but the registration documents (the V5) should show the registered keeper to be the person who uses it on a daily basis, such as an employee.

When a car is used by a married couple, the ownership of any property is typically classed as joint. If the husband was driving the vehicle and stopped by the police for having no insurance, the police would normally accept that he was a joint owner of the vehicle and not investigate the wife for further offenses, such as the owner permitting no insurance.

Whether that helps at all...

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Replying to janewanless:
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By FactChecker
31st Jan 2024 17:51

All perfectly true, but Chessaccountant's passing reference to the V5 was only an unfortunate distraction.

The rest of their response:
"By all means he can loan her the car for business use, but I cannot see any way for her to claim the capital allowances. It is not her asset and it is not her expense"
... is what I take to lie at the heart of OP's question.

If that assumption is correct, then I'm still unclear as to any basis for opposing it.

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By tom123
01st Feb 2024 08:00

Sounds like the husband had the credit worthiness to take out the loan, and the wife wants the capex.

You can't have it all / both ways.

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Replying to tom123:
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By I'msorryIhaven'taclue
01st Feb 2024 10:09

That, no doubt, will be because she's self-employed.
It comes to something when the unemployed husband has a better credit rating.

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By David Ex
01st Feb 2024 13:21

gillsoffice wrote:

She uses the car in her business and we usually claim 75% business use.

Hope you don’t mean that literally. Claims should be based on actual mileage records, shouldn’t they?

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By gillsoffice
01st Feb 2024 15:27

Thank you all for your help. It's good to know there are other accountants out there when you work alone, as I do, and need a bit of advice.

FYI Husband and wife are high earners, the car was paid for out of joint funds, no credit required, and I always check with my clients that the % business use is correct and they have records. They just didn't check with me first before buying the car to ensure the paperwork was accurate.

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