Vehicle hire contract deposit
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hairylairy
Registered Posts: 22 New contributor 🐸
Does anyone know if a deposit paid (equivalent to 6 months hire) is fully allowable as an expense on top of the monthly repayments, for a new vehicle, for a self employed car salesman in his Self Assessment. Or maybe it should be a prepayment?
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Does he get the deposit back?0
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Thanks douglasstroud
That I don't know, I'll have to check.
What difference will it make please?0 -
You need to see the terms of the agreement, is he just hiring it, leasing it or buying it?
All are treated differently0 -
I'll be sure to get a copy, might be back on here at a later date!0
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I've so far discovered the car is on a 36 month contract hire, with none refundable deposit. Does that clear things up? I'm struggling here.0
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So definitely contract hire which is basically an operating lease, if you are using cash basis then just treat all payments as and when they are made including the deposit, if using accruals you need to look at the deposit taken, sometimes it will be be for the first few months and then some at the end, if this is the case I would treat any part of the deposit that is for the end of the contract as a prepayment.1
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Thank you so much for your help. Presumably a deduction off payments of 15% for co2 emissions over 50g/km as well.0
