Leasing

[Hatter The Mad]

Hi,

I'm deciding whether or not to buy a car second-hand (£8-12k) or to lease.

If I leased the car, I could justify putting it down as a business expense (I am self-employed), thereby claiming back VAT (15%) and technically receiving a 30% 'discount' on it because I won't have £leasecost income taxed.

I would not be able to write down the cost of a second-hand purchase as a business expense.

To add to the decision, I owe the student loan company around £8k, which could pose (in the grand scheme of my finances) as a really cheap car loan.

With this in mind, does leasing a car become a sensible option for me?

Thanks

 

[Hatter The Mad]

And you'll have to pay company car tax on it.

Even if I am a sole-trader?

 

[Hatter The Mad]

If it's being run as a company vehicle, ie you are claiming back tax, then yes.

That wasn't my understanding, but thanks for bringing it to light. If it is the case, I won't be leasing.

Personally I think it depends how ethical you feel when putting things down as business expenses

My ethics are flexible

edit: and why a sole trader? I don't think I would risk being less than an LLP or LTD

What do you mean risk? I'm an independent consultant, why would I want the fuss of forming a LTD

 

[Hatter The Mad]

Given your insurance on a Fiesta is £1,300 I guess you are what, 17-18?

21, 22 in a few months. I wouldn't owe the student loan company money if I was 18, would I?

Why would somebody hire a 18 year old contractor as a 'consultant'? Isn't the point in being a consultant that you trade on considerable experience, etc?

Despite being irrelevant, I was also doing what I do when 18. I'm a manager of a software company (that has no UK presence) and an web designer/consultant in my spare time - therefore I lump the two together as 'consultant', working on a contract basis and remain a sole trader.

 

[Hatter The Mad]

Quite, your insurance quote threw me, damn you need to shop around

Well, it was my first year driving and I live in high-risk postcode at the moment. The policy isn't too bad either - free breakdown cover, free insurance on any other non-two seater, < 3.5l engine and non-4x4.