Partnership Car

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anniem
anniem Registered Posts: 1,326 Beyond epic contributor 🧙‍♂️
I have a partnership client who wish to change their car. The car they have has not been run through the partnership, but I'm not certain why not; something to do with previous accountant (other issues have also arisen from previous accountant, so don't hold too much stock by what he/she did)

Not a VAT Registered business.

Are there any specific reasons why they can't run the car through the business. They live about 10 miles from their business and don't need to do a great deal of business mileage, so a high percentage of their vehicle use would be private.

I don't see any reason why it can't go on as an asset for the allowances and just remove % of all running expenses for P&L.

Am I missing something?
FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire

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  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    anniem wrote: »

    Am I missing something?

    Possibly that claiming a mileage rate instead of a % of actual costs and capital allowances less balancing allowances on sale would be more tax efficient?

    As you know, you can change the method of claiming for vehicle expenses when the car is changed and then have to stick with it. With low business use, a mileage rate is often more tax efficient.

    If they aren't changing the car you have to stick with the way motor expenses were claimed previously. If no motor expenses were previously claimed then I guess you can choose now whether to bring it in at market value and charge a % or claim mileage rate. If mileage was previously claimed you have to stick with it.

    Hope that helps :)
  • anniem
    anniem Registered Posts: 1,326 Beyond epic contributor 🧙‍♂️
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    They have never run their car through the partnership.
    FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    Not even claimed mileage?! Hmm, see what you mean... In which case, do some projections and work out which method is going to get them the most tax relief :)
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