Car finance claim costs for self assessment

Basil1

Hi,
I have a friend of mine who has several rental properties who is in the process of completing his self assessment tax return. During the year as Landlord he travels between these sites in a £600 per month leased Range Rover. He tells me that 30% of the mileage he completes in a year is relevant to his rental mileage so is assuming he can claim 30% of the £600. My question to you good people is that will HMRC view it that he really doesn't need such an expensive car and the 30% is excessive considering that the same work could be carried out in a much cheaper car . Any advice would be helpful.

lenacarter

Hi,
There are a few questions that will need to be answered before we can say anything in more details.
Is he trading as sole trader or through a ltd company?
Is the car leased, or is it a hire purchase? There will be different treatments for that.
Is the car a high emission car with CO2 emission over 110g/km? There will in that case be a restriction.
I am by no means an expert, but I do think there is a need for more details in this case.

Basil1

Thanks for your reply. I will ask him the questions

Basil1

220mg emissions, sole trader and leased.
Thanks

douglasstroud

HMRC have no right to tell you what sort of car you should drive!
30% does seem high for a rental business obviously depending how many properties, have you thought about claiming the mileage instead? would that not work out better?

lenacarter

I think maybe @doublasstroud may be right in considering claiming mileage.
I am now not sure what, if any, of the leasing costs in a property business can be claimed either, as the cost of the vehicle is not deductible. Have a look here https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2220.
I would recommend that you get advice from someone that have experience in property business, unfortunately I have not got enough experience so cannot give you a firm answer.

Basil1

Ok Thanks for your help.
I always recommend claiming the mileage and keeping a log of the visits. He has been told otherwise by someone else in the past re: 30% question

Basil1

He has been claiming 30% of the lease on the car as an expense rather as a capital allowance. The emissions as you rightly say do have a bearing on it and a further 15% must be deducted. The reason for asking all this is that unfortunately his accountant has passed away and he's compiling his own self assessment as we speak. .