I'm self employed and not VAT registred (but could be as most of my customers are VAT registered businesses).

I use my own private car for business travel and simply claim 40p per mile, nice and easy.

Now in the future I will probably want to get a new car and I've been looking at contract hire as buying a new car is out of the question and I don't really want a loan.

I've seen Ling's website and the prices look good but I'm unsure on if to get business or personal contract hire.

Obviously if its personal, I pay all the costs and I simply do as I am and clain 40p per mile back.

How does it work if its a business contract. I know if I was VAT reg. I could claim the VAT back but could I claim all the cost back including...

hire cost
insurance
tax
fuel

If this is true, how would it work, and what are the tax implications when I use the car for private miles?

Many Thanks
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If it's a business contract hire then effectively the business "owns" it and providing you with the use of the car.

The tax implications for you as a person would be the same as if the company gave you a company car.

So on the one hand you can claim back the VAT and deduct the cost of the contract from your company's P&L, but personally, you'd have all the company car personal tax issues.

You'd need to weigh up the tax saved on the company versus the tax you'd have to pay.

See here http://www.google.co.uk/search?hl=en&q=company+car+tax+calculator&meta=

or get your accountant to do a quick calculation for you.
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If you are VAT registered you can claim half of the VAT back.

You may not be able to charge the full leasing cost against your taxable profits. There would be a restriction if the capital cost of the car is over ?2,000 and a further restriction for private use.

Company car charges do not apply if you are self employed.
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