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Posted Tue, 13 Jul 2021 16:22:45 GMT by Simon Newman
I am looking at a car for my business in which I’m a sole trader My understanding is electric cars are 100% deductible and anything else is only 85% (15% penalty for not being 0kg Co2) My question, if the above is correct, does this need to be a lease deal, where you pay rentals and hand back, or can this be a PCP deal where you could buy the car at the end of the term via ballon payment? I also understand you need to consider business and personal use when claiming
Posted Thu, 15 Jul 2021 12:40:11 GMT by HMRC Admin 9
Hi, 

Please see guidance regarding claiming costs for cars as an expense and the precentage used here: 

Capital allowances and balancing charges (Self Assessment helpsheet HS252)

and 

CA20000 - Plant and Machinery Allowances

Thank you. 
Posted Thu, 15 Jul 2021 13:20:43 GMT by Simon Newman
Thanks for the reply I had a read and looks like that’s for claiming capital allowances I am not looking for that, more specifically I’m looking to see if I can buy a car on PCP and claim as an expense
Posted Mon, 19 Jul 2021 10:52:42 GMT by HMRC Admin 18
Hi,

Yes you can.

You then can claim the cost and interest on this and if you make the balloon payment at the end then you can calim the remainder.

Thank you.
 
Posted Sun, 01 Aug 2021 19:54:16 GMT by ben1
Hi There, totally new to this so apologies if barging in to a conversation. I have just registered as sole trader and I have purchased a van outright, from savings, that will be 100% for business use only. My understanding is that when I come to do my self assessment I am able to deduct the purchase price, road tax, insurance costs and all fuel expenditure from my profits before calculating my taxable income? Have I missed something? many thanks.
Posted Tue, 03 Aug 2021 07:53:20 GMT by HMRC Admin 17

Hi,
 
This will depend on how you are claiming the van. i.e  whether you are using simplified expenses or not.

Guidance on this type of expenditure can be found here :

Capital allowances and balancing charges (Self Assessment helpsheet HS252)   and  :

HS222 How to calculate your taxable profits (2021)

and:

Business Income Manual  .

Thank you.
Posted Thu, 27 Jan 2022 12:28:33 GMT by steppeck Peck
Hi. With the PCP purchase, can this be a used electric car? Do the same tax allowances still apply? Thanks, Steve
Posted Fri, 28 Jan 2022 12:43:26 GMT by HMRC Admin 20
Hi steppeck Peck,

Please see guidance here regarding cars and capital allowances:

Capital allowances and balancing charges (Self Assessment helpsheet HS252)

and

CA23300 - Plant and Machinery Allowances (PMA): hire purchase: contents

Thank you.
Posted Mon, 07 Feb 2022 11:16:53 GMT by mike josh
Much appreciated. Great info Car

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