Hey all,

Our business involves the sale of specialist aftermarket products for performance japanese cars such as the Subaru Impreza and Mitsubishi Evo and so on.

Being an enthusiast my self i'll be looking to buy my self a car at some point in the near future. One sure way to promote this type of business is the practice what you preach - fit the products you sell to the car and plaster the company name all over it for show and shine at the big national events. We'll also use it for magazine features and track days.

Here it comes... :) If i took out a loan to buy the car, what can i offset against the business? Could i put it through as a fixed asset for example?

Thanks in advance
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The answer will depend on the type of entity you trade through. Is the business incorporated?
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Sole trader at present...
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Ok, as a sole trader you can capitalise the car and claim capital allowances resticted for the private use.

You can also claim the loan interest and running costs but again restricted for private use but I know whats coming now:-

"But because my car is covered in advertisements, stickers etc then there is no real private use because its all advertising...." ?

I'm afraid not.
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No i wasn't expecting to claim 100% because we have some stickers on the car. If only it were that simple hey :)

Last year i clocked up around 9,000 miles attending shows across the UK in our demonstrator car to promote the business and our services. I owned the car long before the business came about and so it was paid for privately. I've only claimed for fuel expenses pence per mile so by using the car that way i've beared the expense in wear and tear/depreciation of value etc...

I wonder if it would be cost effective to put it through the books this time?
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Do you mean you used the the approved mileage rates?

If so this possibly is the most efficient way but this is affected by the number of miles and the value of the car and the element of personal use. You would need to crunch some numbers for a definitive answer.

You can only do this is your turnover is under the vat registration threshold.
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That's right, i claimed 40p per mile for business mileage as it was a privately owned car.

If i buy another car i'll continue to do this no doubt, it seems the simplest and most cost effective option but wasn't sure if i can claim anything else in proportion to how much i use the car for promoting the business.

Given the nature of the business (performance car tuning parts) pocket rockets and co2 friendly cars wont bring the right audiance so i'll need to take out a small loan to buy it.

Thanks for your help
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I've been told by another accountant that i should be able to hire my own car to the business if im using it as a demonstrator at shows and events as well as claiming back the mileage rate.

Is that right? If so how would i go about it. Thanks!
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I suppose in theory this may work but you would have to calculate the cost by comparing the cost of hiring a similar car from Hertz etc and dividing it by the appropriate number of hours.

I don't expect HMRC would entirely love this but its not unreasonable.
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I've been told by another accountant that i should be able to hire my own car to the business if im using it as a demonstrator at shows and events as well as claiming back the mileage rate.

Is that right? If so how would i go about it. Thanks!

If you're a sole trader, hiring it to yourself doesn't make sense. :|
Your business will incur costs of, say, ?000 a year in hire fees - which are then taxable on you as income - net result, Nil.
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As to whether you can claim it as a business expense: yes.
You can either charge 40p a mile (25p after the first 10k miles) or apportion all the costs including capital allowances. Only by keeping track of this throughout the year will tell you what method will prove more tax efficient. Once you have chosen a method you have to stick with it until you change vehicles.
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That makes sense, thanks.

40p per mile seems to be the best option given the miles we cover each year.
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