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Sole Trader & Company Car?

  • 21-11-2005 9:46pm
    #1
    ButtermilkJack
    Registered Users, Registered Users 2 Posts: 632 ✭✭✭


    Can anyone give me a brief outline on the following.

    I'm registered as a sole trader for a small part-time business I run from home (evenings/weekends) but also work in full-time employment (mon-fri, 9-5). I want to upgrade my personal car and was wondering what I can and cant do.

    Can I lease a car from a garage and put it down as expenses, or will the taxman not allow that on the grounds that the car will be out of use for most of the time? Could I argue that the car is for business use mostly as I take public transport to/from work,and the car is used to meet clients evenings/weekends?

    If not, how do I account for expenses occured with my private car, should I choose to upgrade it privately?

    Thanks!! :)


Comments

  • #2
    Kinetic^
    Closed Accounts Posts: 13,249 ✭✭✭✭Kinetic^


    ButtermilkJack wrote:
    Can anyone give me a brief outline on the following.

    I'm registered as a sole trader for a small part-time business I run from home (evenings/weekends) but also work in full-time employment (mon-fri, 9-5). I want to upgrade my personal car and was wondering what I can and cant do.

    Can I lease a car from a garage and put it down as expenses, or will the taxman not allow that on the grounds that the car will be out of use for most of the time? Could I argue that the car is for business use mostly as I take public transport to/from work,and the car is used to meet clients evenings/weekends?

    If not, how do I account for expenses occured with my private car, should I choose to upgrade it privately?

    Thanks!! :)


    Hi Buttermilkjack,

    IMO, it would be a waste of money for you to lease a car for a part time sole trader operation, unless of course you're making enough money to warrant such a purchase (but if you could do that, I would imagine that you would give up your full time job and work as a sole trader only).

    In order to claim some expenses, you calculate how much it cost you to run the car for the year, petrol, service etc. Then you take a % out of that for private use, lets say 50%. So 50% entire motor costs for the year would then be allowed to write off against your income, therefore reducing your tax liability.

    I'm using the 50% as an example. You should come up with a more realistic % as the revenue would not accept that the figure would be at 50% - 100%, unless of course you could prove otherwise.

    I hope I've been of some help to you and any more questions just ask.
    Cheers, Mark.


  • #3
    ButtermilkJack
    Registered Users, Registered Users 2 Posts: 632 ✭✭✭ButtermilkJack


    Hey Mark, thanks a million for the reply. Yeh I was thinking it would be more beneficial to just buy private and then charge the business for use of the car. You're right about the money, if I had enough to buy through the business I'd leave the 9-5, but as for now, it's only a dream :D

    I'll let my accountant (whenever I get one) work out the figures. :p

    Thanks again.


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