To buy or Contract Hire (self employed)?

Jez · 14 Feb 2014 at 14:29

Jonnycoupe said:
What sort of crackpot job is that where they use their own car?

Almost always the wisest choice is to take an allowance and fuel allowance and use your own car, offsetting the difference.

Its what we all do (It consultancy, high mileage).

mattyg · 14 Feb 2014 at 14:32

Jonnycoupe said:
What sort of crackpot job is that where they use their own car?

Its just a tool for the job

booyaka said:
cheers for the info. I stand corrected my good man.

No worries. I remember when 150 miles felt a lot

Jez said:
Almost always the wisest choice is to take an allowance and fuel allowance and use your own car, offsetting the difference.

Its what we all do (It consultancy, high mileage).

Jonnycoupe · 14 Feb 2014 at 14:37

172k!! Wow.

Jez · 14 Feb 2014 at 14:38

Out of interest, how do you (or your drivers) structure that sort of mileage when it comes to the vehicle?

Cheap Vauxhall Insignia/Ford Mondeo once per year then bin off on ebay for buttons? I'm not sure how i would work it.

mattyg · 14 Feb 2014 at 14:39

Jonnycoupe said:
172k!! Wow.

Yeah he managed 12 months and went through 2 cars.(peugeot 206's) Paid for his extension on his house

mattyg · 14 Feb 2014 at 14:42

Jez said:
Out of interest, how do you (or your drivers) structure that sort of mileage when it comes to the vehicle?

Cheap Vauxhall Insignia/Ford Mondeo once per year then bin off on ebay for buttons? I'm not sure how i would work it.

He's been at it a while and also buys and sells cars.

He usually keeps an eye out for cheap low mileage 206's buy off OAP's with only 30-40k on the clock cheap as chips put 80k on them and sell for almost what he paid for them.
You make your money when you buy them.
He has his next one sat in a lockup waiting for his current one to "expire"

I have another that pays more and gets a £10k low mileage newish vehicle and on 4yr finance who has VT'd at halfway point. Although I don't know how often he's managed to do that.

Jez · 14 Feb 2014 at 14:45

Oh right, i cant fault the financials but i don't think i could drive a tiny car like that over that kind of distance, i am too reliant on cruise control and auto gearboxes

Jonnycoupe · 14 Feb 2014 at 14:49

Probably appreciates the long term comfort offered by his home extension more!

Jez · 14 Feb 2014 at 15:09

Haha true

Dr House · 14 Feb 2014 at 19:06

Thanks for the info guys.

Reading this is what made me think I could claim the rental cost against tax.

http://www.sjdaccountancy.com/business/business-finance/managing-costs/buy-hp-or-lease#operating

Operating leases

An operating lease is where an asset is rented for a period, not necessarily fixed, and returned to the owner at the end of the period. Contract hire is a typical form of operating lease.

Accounting treatment

The asset is not capitalised; the rental payments are charged on an acceptable basis over the lease term to the profit and loss account.

Tax treatment

The accounting treatment is an acceptable treatment for tax purposes, where the accounting standard has been applied. No adjustments to profits, therefore, need be made.

Where the asset is a car with CO2 emissions exceeding 130 g/km, there is a flat rate disallowance of 15 per cent on the amount of rental payments allowed for tax purposes.

Capital allowances are not available.

I will give the accountant a call on monday.

Peerzy said:
Just something to consider - you and your wife seem to enjoy changing and swapping cars regularly. Take into account any costs you may incur if you decide to change after say 12 months.

Yes I had thought about this and its one of the down sides however my wife does not mind keeping her cars for longer. I rather change every 6 to 12 months.

Spamalot - The car is a little under powered but its not too bad, they are going to face lift the car and bump the power to 300 bhp soon.

Spamalot · 14 Feb 2014 at 19:44

I think the tax info relates to a companies tax as opposed to the employees income tax.

300bhp sounds reasonable.

Dr House · 15 Feb 2014 at 19:09

Ok I was ready to do the CH and then saw how much a used cayenne is.
http://www.autotrader.co.uk/search/...ew/maximum-age/up_to_4_years_old/sort/default

Am I missing something or does a Used 4 year old car only cost £10 to £12k less than a new on.

My I am starting to think I should just buy a new one keep it for 2 to 3 years and get out with a £8 to £10k loss. The only thing is the face lift is due in the next couple of months so I would wait for that.

ndaar · 15 Feb 2014 at 19:32

Im self employed and got my latest merc cla on "agility" ie PCP

Price 35K
I put down £2,000
Per month its £400
5 year deal
GFV 13K I think

accountant claims back 50% of the vat per month as well as all the servicing costs (£29pm)

I think when I trade it in I will probably get my 2K back plus some more than I put in.
So cost for 5 years would be:

Cica £21K