UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
If you are self-employed, you can claim capital allowances on the cost of the car and the actual running expenses of the car which include fuel, insurance, repairs, servicing, road fund licence, MOT etc. The running costs would need to be adjusted for non-business use in the same way that the capital allowances would.
You would not claim a mileage allowance if you are claiming capital allowances. You would claim the actual running costs. The mileage allowance is set at a level which is deemed to cover all the running costs and the depreciation in the value of the car. Take a look here for more information on this.
So...am I right in thinking that if I claimed the FYA for the low emission car, I would be able to also claim 50% of the running costs (under Allowable Expenses section of the Self Assessment form) which would include:
... Instead of using the 45p mileage rate?
What would the situation be if I bought the car on a finance deal? Can I still put it through as a FYA for the full amount (50% of the cost in my case) and if so, can you claim relief on the interest if there is any?
If you used the car 50% for business, the first year allowance is £6,000 and the loss is £4,000.
Take a look here for guidance on using trading losses. In summary, these are your options:1 You can carry forward the loss for offset against future profits from the same business only.2 You can offset the loss against other income in the same tax year or the previous tax year including trading profits of the earlier year. If you had no income in those years, you can offset the loss against capital gains.3 For losses incurred in the first four years of a business, you can claim relief against income of the three previous tax years, earliest year first.
See step 3 for the tax credit treatment of trading losses here.
I'm not expecting to do too much travelling as far as mileage costs go, and feel that claiming a FYA would have greater benefits in the long run as far as my tax liability goes...(would help increase my tax credits as well...)
I understand that - so, would I be able to claim the FYA for business use over the two jobs, or would it be easier to just claim the 70% use for the one job ( self employment. ) and not bother claiming for the part time job...
Going back to your previous advice: 'An employee cannot claim capital allowances for cars I'm afraid. Employees can only claim the mileage allowance. You should only claim for the self-employment use percentage against that business income.Let me look at the allowances/mileage allowance situation and I'll get back to you later.'
Am I allowed to claim 70% business use for the self employment; 20% mileage allowance on the other employment; and 10% Personal use - all on one car...
...So it can't be split between the two jobs for one car?
If you are referring to capital allowances then the answer is no they cannot be.
You need to keep a record of your mileage for the year and make a claim for the business usage proportion at the end of the year. It's simple. Look here.