Expensing car purchase cost? (NOT VAT)

JohnCleary

Hi all,
Just spent a considerable amount on a replacement car. Car is 50 / 50 personal / business.

To date, I expense all running costs 50 50 (insurance / tax / service etc.)

As this car will be used 50 50 for work also (self employed), can I expense a portion (50?) of this purchase, or is that a no no?

I'll check with my accountant, but would appreciate feedback here.

It's not an issue if not, but if I can, why wouldn't I??

JohnCleary

As I suspected, can't be done.

Sole trader btw

JohnCleary

JohnCleary wrote: »

As I suspected, can't be done.

Sole trader btw

You should certainly be able to depreciate the car (or a portion of it which could be higher than 50% too) over a number of years so would reduce your tax bill. You should also be claiming tax, insurance, fuel etc against your tax bill.

JohnCleary

Kendrick Glamorous Quintessence wrote: »

You should certainly be able to depreciate the car (or a portion of it which could be higher than 50% too) over a number of years so would reduce your tax bill. You should also be claiming tax, insurance, fuel etc against your tax bill.

Thanks for the info. Yes, I am claiming running costs (insurance, tax etc.) - I will look further into depreciation... if you (or anyone) can offer any further insight into this, that would be great.

Just incase it matters....
Buying the car out-right (no finance / trade in)
Sole Trader
Currently 50 / 50 on expenses (50 personal / 50 business use)

CIARAN_BOYLE

The tax name for depreciation is capital allowances.

Alan_007_

Calahonda52 wrote: »

What records will you be keeping to show the split?

Have you considered the civil service mileage rates as an alternative: it depends on the miles you do

I'm pretty sure sole traders cannot claim civil service mileage rates and can only claim the actual expenses incurred.

Stratvs

Alan_007_ wrote: »

I'm pretty sure sole traders cannot claim civil service mileage rates and can only claim the actual expenses incurred.

Correct.

Also, in relation to Capital Allowances, there are limits on capital value based on the CO2 emissions of the vehicle.
https://www.revenue.ie/en/tax-professionals/documents/notes-for-guidance/tca/part11.pdf

lalababa

Used to be capital allowance of 12% each year of new list price from new to 8 years old?? ? So 6% in your case.

lalababa

Is depreciation always a capital allowance rather than an ordinary expense? Does this mean the depreciation as a capital allowance can only be deducted from the income tax figure? Or what?
If this is the case then depreciation is a very handy 'expense' and is 'worth' much more as a capital allowance than an ordinary expense. Am I getting this right?

Stratvs

lalababa wrote: »

Used to be capital allowance of 12% each year of new list price from new to 8 years old?? ? So 6% in your case.

CA is 12.5% pa then restricted to the relevant allowable %.

lalababa wrote: »

Is depreciation always a capital allowance rather than an ordinary expense? Does this mean the depreciation as a capital allowance can only be deducted from the income tax figure? Or what?
If this is the case then depreciation is a very handy 'expense' and is 'worth' much more as a capital allowance than an ordinary expense. Am I getting this right?

No. The CA is deducted from relevant taxable income not from actual tax. So if CA is €1,000 it is worth €1,000 @ whatever Tax/PRSI/USC rates are applicable. It is not worth €1,000 off the tax bill.

Spark Plug

You'll have to give us more information in relation to the CO2g/km of the car.

Of the purchase price of the car - the maximum amount that can be claimed annually via Capital Allowances is €24,000 * 12.5% = €3,000 p.a. for vehicle Categories A (0-120g/km), B (120-140g/km) and C (140-155g/km)

The specified amount (the €24,000 figure) is reduced by 50% to €12,000 * 12.5% = €1,500 p.a. for vehicle Categories D (155-170g/km) and E (170-190g/km) and for vehicle categories F (190-225g/km) and E (225+g/km) no amount can claimed as capital allowances.

JohnCleary

Thanks for the info folks.

So, more info as requested...
Car is a 171, so 2 years old
New list price was approx €64k (I can find this out on Revenue, but let's use this as an example)
Co2 is 109
Depreciation Code Allocated by Revenue D2


From replies above, it seems that I can indeed expense the car for 6 years (as the car is 2 years old) at 6% (As I expense 50 / 50) - Can anyone confirm this? This would be quite handy.

Rulmeq

JohnCleary wrote: »

From replies above, it seems that I can indeed expense the car for 6 years (as the car is 2 years old) at 6% (As I expense 50 / 50) - Can anyone confirm this? This would be quite handy.

No, the link provided earlier gave you the correct information - (based on the CO2 figures for the car). You need to talk to an accountant, instead of relying on random people guessing on the internet.