I am getting really confused with Capital Allowances, I know how to claim them etc but i am confused about what else can be claimed in a self assessment with regards to expenses relating the the Car i am claiming Capital allowances against.
If you are claiming capital allowances on a car can you also claim petrol, MOT, Repairs etc on the car?
I have read differing things, some say yes some say no...
Not sure if you are a sole trader or a limited company but will assume you are sole trader.
There are two main ways of getting tax relief if you run a car.
Firstly you can claim all the costs eg petrol, MOT, insurance, repairs etc together with capital allowances. You would then disallow a % of the total to account for personal use.
Secondly you can just recharge the business for business mileage at up to 45p for the first 10k miles and 25p thereafter.
In your case it appears that you want to do the first option so yes you can claim the running costs and the capital allowance but must disallow a % for private use.
Yes it is for a sole trader, so I can claim back 20% on the capital allowance and all the repairs, petrol and mots etc... personal use is 50%, easy enough to calculate.
Say your car cost £10k and has CO2 emission of less than 160gms/kg. Then you calculation would be
Cost £10k
CA (20%) (£2k)
TWDV £8k
You would only be able to claim 50% of the CA ie only £1k but your TWDV to be carried forward to next year would be £8k and not £9k. Effectively you lose £1k worth of CAs given the car is 50% used personally.
The other running costs you just total for the year and only claim 50% on the basis that it is 50/50 business/personal split. You cant claim them all. Just the business element ie 50%. Say your costs for the year are
Petrol £1200
MOT £50
Repairs £300
Insurance £300
Total £1850
You would only be able to claim £925 based on 50% of the costs are personal and cant be claimed.
Therefore in total you would get a deduction of £1925 (£1k + £925) against taxable profits for the business based on the above costs and 50/50 personal/business use.
Thank you Mark. Could you help me with one other thing please?
I have been working in Germany and as part of my earnings from the agency I have been working for they agreed to reimburse my rent for the flat I was living in. They paid the amount in with my pay from them each month. Do I just class this as income on my self assessment? Also during the year I lived in the Mess (Army Accommodation) and was not provided with a kitchen just a room and therefore had to buy food, can any of this be claimed back do you know?
Would expect the reimbursed rent would be netted against the rental cost to show a £nil position.
Wouldnt expect you could claim any food. Regardless of where you lived you wouldu still need to buy food to each and therefore not "wholly and exclusively" for the purposes of the business.
Really depends if the rent is a business expense or not whether included or not. Depends what you were doing there.
If you had to stay there as part of business then the rent would be a business expense. If not then it wouldnt and any reimbursed would be a profit (just like your earnings).
Probably need to seek professional advice and sit down with someone with all the facts and figures.
It was defo a business expense as I would not have been there if it was not for work. when I had to take holidays because of Army stand Down then I would have to go back to the UK.
As i believe this is for business only, should I deduct the amount from my income?
