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Post Info TOPIC: Registering Car As Business Asset
Suffolker


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Registering Car As Business Asset
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I use my car about 90% for business purposes and currently record my miles ready to claim the 40p per mile.  I seem to be paying out quite alot on repairs, insurance, tax, petrol etc at the moment though and am wondering if it would be worth registering the car as a business asset.

The thing is, would the car be classed as a 'company car' even though I'm just a sole trader rather than ltd company? Also if there a form I would have to fill in to register the car?

Many thanks in advance



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Gaynor


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When you claim your 40p per mile expenses, this covers also wear and tear on the car, fuel is only i believe about 10p of the 40p you actually claim, your tax insurance and repairs can be put down as overheads of the business but make your accountant aware that the figure need to be adjusted to allow for private use.
If you decide to register the car as a business asset, it could cause you more tax problems than its worth.
hope this helps

Gaynor

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Suffolker


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Ah right thanks Gaynor. Think I will just carry on as I am with the 40p, it sounds alot simpler! When you say overheads, should I record the car repairs as drawings through sage because I paid for them through the business account or should I post them to the car expenses nominal code? 

Many thanks

-- Edited by Suffolker at 12:13, 2008-12-01

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rowets


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Suffolker wrote:

Ah right thanks Gaynor. Think I will just carry on as I am with the 40p, it sounds alot simpler! When you say overheads, should I record the car repairs as drawings through sage because I paid for them through the business account or should I post them to the car expenses nominal code? 

Many thanks

-- Edited by Suffolker at 12:13, 2008-12-01


Hi Suffolker,

You can introduce the car into the business as a business asset, the business use would warrant that.  There are no 'forms' to fill in, it would just be introduced into the accounts at its Net Book Value (debit Fixed Assets, credit Capital Introduced).  You would then claim Capital Allowances on the vehicle according to the current Capital Allowance rules and rates, depending on the type of vehicle it actually is.  You would then have to make an adjustment to add-back the private use element.  As far as the 40p per mile is concerned, you can only claim one or the other, either the 40p per mile and no other expenses, or claim expenses (fuel, tax, insurance, repairs etc) on receipts, but not both.  If you claim the mileage rate and then subsequently pay for any other motor expenses through the business you are correct in assuming that they will have to be posted to drawings.

Hope that helps,
Tim




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Tim Rowe
TSR Accountancy & Bookkeeping Services
Gaynor


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HI,

I would post your Tax insurance and repairs to drawings,

regards Gaynor



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Suffolker


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Hey Tim, Thanks for your reply.

It all sounds quite complicated! My car is only an old (1993) Renault Clio! So I'm not sure if it would work out better as a registered asset or just do the 40p?

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rowets


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Ah, right. Stick with the 40p!!!!

Tim

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Tim Rowe
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Suffolker


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biggrin I thought that may be the response!! The business needs to take off abit more before the car is updated smile

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