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Old 27-04-2019, 02:50 PM   #1
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Default Company Vehicle for a sole trader

My wife is a dog walker, we also board dogs at home. She is generally a little way over the income tax threshold so an outgoing of around 200 a month would be a massive bonus, giving us a free vehicle. She has a signwritten dogvan, an old doblo which has been superb for the 6 years she has been going, but want something newer.
We have a family car, a late Octavia, I have my 181 trekker and 14 motorcycles, so can argue the dogvan replacement would be used for business use only.
We were all geared up for a BRAND new Caddy maxi life, which would serve her needs but also allow us to sleep on the beach etc when the opportunity arose. We got the dealer down to 17 k new. We would put a chunk down and the load repayments over 5 years would come in under, or around, the 200 pcm.

NOW THEN!!! The company accountant from the Firm I work for is a director on many firms boards and knows his onions, he says we CANNOT offset the load repayments against tax, nor can we offset depreciation of the vehicle, as my wife is a sole trader. We can only set the entire purchase price against her annual income, if the vehicle is 20k and she earns 15k we would be minus 5k and carry that over into the following financial year. This seems very complex, we are CONSIDERING looking at LTD status, which is VERY complicated at our level, is there any other way to finance a company vehicle for around 200 a month which would keep us under the tax threshold and effectively, cost us nowt, other than the deposit????

I am NOT a numbers man, my wife is a little more clued up, where are we best heading guys??? Thanks in advance.
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Old 27-04-2019, 04:02 PM   #2
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I think you need to take advice from someone who does the accounts for people in a similar situation to yours, not someone who deals with much bigger stuff.
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Old 13-06-2019, 11:20 AM   #3
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As above take expect advise. And from a small business accountatnt. I don't know if Bristol would be too far away, possible not if you're in Chepstow my old accountant was an excellent tax accouant. I was sole trader and later went Ltd, it was very beneficial so don't be put off by it. Just avoid VAT which I'm sure you can.

But when I was self employed my accoutnant relucantly allowed me to put my motorbike against my business as I worked from home, but if I went out to visit clients I'd go on the bike - and I obviously never used the bike for pleasure use ;-)

The correct way I belive, and I think this might actually work out better in the long run is to have it as a personal vehicle and you essentially charge your business-self the for the use of your own private vechicle. You can do this I think by either claiming fuel, for business journeys or the better way is to claim mileage. You can claim at something like 40p a mile which is way above what it costs you, as this is intended to cover not just fuel but a percentage of your running and maintence cost.

Once you've got the vehicle you can put business specic stuff in it and charge 100% to the business, so dog gaurd, seat covers, boot mats, even roof racks if you could legitmatly say it was for dog related business.

Granted it will take longer to cover the cost, but if you wanted a new vehicle and you're goint to be paying for it anyway you'll get money back (or not actually get it back, but reduce your taxable income). And doing it this way you're totally above baord to use it for personal use. Which as you say - you'd use to sleep on the beach, which I presume isn't during the course of business.

This will also continue for each year of ownership and not just the hit in the first year.
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