Hi there i am in a frustrating situation that i would love a Auto but i have to settle for a manual!
I am a sole trader & I can put 20% of the value of the car per year against my earnings on a Manual but only 10% on the auto!
Very frustrating as I wanted the Auto but if I keep the car for 3 years I could claim more than £7000 Extra back if I ordered the Manual over the auto.
It's all to do with the emissions & anything under 160 I can claim 20% back & anything over 160 i can only claim 10% of the value of the car back. The manual is 149 & the Auto is 174!
Arrrr!!!!!
That's why we need the 8 speed box with the stop/start.
Hi
Yeah, I'am in exactly the same posistion had an auto for years but back to manual down to the 20% write down allowance.
Still I am over the moon I am gonna have my Evoque in January even though it's a manual! It's a great tax break for us sole traders to be able to offset 20% of the value each year just wish the auto came in under 160 emissions!
Maybe it will in the future?
Must be nice, having all these tax breaks (or as i like to call them fiddles lol) being employed and paying PAYE tax is a pain in the ass.
So are VAT returns!
I didnt know that!! I was about to change from a manual to auto box as Ive had an auto for the past 7 years. Maybe I'll leave it as it is!
Anyone know a better accountant than the one Ive got
Andy, as I've tried to explain to you in PMs, you can write off the expense of the vehicle (initial cost - resale) over your period of ownership whether you have manual or automatic. What changes is the timing of the tax relief. For a lower emissions vehicle, it's 20% per year, for a higher emissions vehicle, it's 10% but when you sell the thing, the difference between the book value and the resale price is available as a write-down so that, over the period of ownership the total write-down allowance (WDA) is the same. For a higher emissions vehicle, the write-down is biased towards the end of ownership.
Keep in mind too that if your car costs £30k, you will have a WDA of 10% of £3k. However, that doesn't mean you actually get a £3k subsidy from HMRC to run your Evoque. You only save the tax you would have paid on the WDA, for a 20% tax payer, £600, for 40%, £1200. The depreciation of the Evoque is going to cost you real net of tax GBP.
The effect of the rules is to change the shape of cash flow of tax saved over the period of ownership rather than the total amount. However, in a situation where your business is expanding and you move from a 20% to 40% tax rate during the period of ownership, there are actually advantages to delaying WDA because you will get tax relief at a higher rate.
YMMV, of course, which is why I suggest you talk to your accountant. For old dogs like me who have retired, none of this applies and it pays simply to pay using the lowest rate of interest incurred (on money borrowed) or foregone (on money from savings).
Griff, you need to be very careful what you use a car for in order to claim tax relief. Wouldn't be many professions you could claim an Evoque was for sole business use.
Charlie's correct. The idea that you can put all your petrol and servicing as well through the business sounds fun to start with until HMRC start asking for a breakdown of business and private use and apportion the costs. At the least, you should maintain verifiable records of business mileage undertaken to defend your corner. Sorry if I sound like a boring accountant, I'm (was) an engineer and I've been there, done that.