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question about CAR tax treatment

wannabebeanwannabebean Feels At HomeRegistered Posts: 72
Hello All

I have a question that relates to a client.

The client has purchased (on HP over three years) a CAR (diesel with a low carbon footprint). He is currently paying £275 PCM to the Loan Company (HIRE PURCHASE PROVIDER). He pays this out of HIS OWN PERSONAL BANK ACCOUNT as the HP agreement was in his own personal name. He then pays the £275 back into his own personal bank account every month (to the exact amount to the penny with the payment marked as "CAR").

Can he claim the £275 PCM as a business expense? Car used only for business? How do you treat this?

Very confused about this one.

Thank You for any help


  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,432
    Is the client a Ltd co or a sole trader?
  • wannabebeanwannabebean Feels At Home Registered Posts: 72
    He is LTD
  • wannabebeanwannabebean Feels At Home Registered Posts: 72
  • peamanpeaman Well-Known Registered Posts: 123
    Depends if he wants to have the car in the company and pay tax on the benefit in kind. If he does, he can claim all car costs and the interest on the HP. If he doesn't, then don't claim any of the car costs in the company and pay a mileage allowance instead.
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