You must own the the car in your name.
For claiming expenses of the car , as you are self-employed you can either use either:
- Actual Method
2. Simplified Method
You could claim a proportion of all running actual costs of the car including repairs, restricted to the business use.
That is, suppose you spend £100 on your car in a month and business use is 70%. You can claim £70 as business expense.
Under this method you will need to keep all expense receipts for 6 years.
You can use the simplified method of 45p per mile for 10000 miles and 25p per mile thereafter which would also cover all running costs. You do not need to keep the expense receipts.
Under both methods it’s advisable to maintain a log of your journeys – attached.
Which method to use ?
You will need to ascertain which method is most beneficial to you.
Please use this calculator to make the decision – Calculator
Its usual to chose Simplified expenses as there is no need to keep expense receipts.
Whichever method once chosen will be used till that particular vehicle is disposed.
There is no need to take the decision when buying the car you may collect all the information and take the decision at year when filing tax return.
Claim business proportion of monthly expenses plus actual monthly running costs. Example: Your leasing expenses are £200 per month and actual running expenses £100. Business use 50%. You can claim £150 as business expenses.
Please note if CO2 emission is over 100g/Km2 you reduce your lease by 15%.
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