We make a lot of deliveries around Carmarthenshire and Pembrokeshire and would like to purchase a new vehicle. What would you suggest from a tax perspective?
Whilst there are many vehicles to choose from, clearly you need something with the ability to carry large loads whilst being comfortable to drive. If a van is out of the question then you may want to consider a light commercial vehicle like a Nissan Navara or Mitsubish L200. As these are classified as commercial vehicles you should be able to reclaim the VAT on them and also claim capital allowances at 100% (subject to certain limits). You may also want to consider leasing a vehicle on contract hire instead. These bring different tax benefits, so you may need to calculate the differences and identify what is best for your circumstances.
As an employee, I use my car regularly for work. However, my boss only pays me 30p per mile. Shouldn’t they be paying me 40p per mile?
If you are required to use your car for work then your employer can pay you any amount. The 40p per mile you refer to is the previous HMRC tax free mileage rate, which has now increased to 45p per mile. Therefore currently your employer is paying you 15p per mile less than HM Revenue & Customs allowances. To enable you to benefit from the additional 15p per mile you can either complete a tax return form or alternatively contact HM Revenue & Customs and complete a form P87. You will then be entitled to claim the tax difference of the 15p per mile based on the number of miles you have driven and the tax rate you pay.
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