Search
Close this search box.
Sign up for our weekly Newsletter

How should I account for my new car?

A question and answer about personal contract purchases (PCPs)
What’s the position on capital allowances if you buy a car on a PCP as a small business owner?
Puzzled woman
Can you take out a personal xxxxx

Share

17 July 2012

Can your business fund a new car through a personal contract purchase?

I’m selling my car and getting a new one on a pcp (personal contract purchase) scheme. My accountant says I don’t have to write it down but I’m not sure he’s right. Can you help?

Our small business expert David Rawlings replies:

If you enter into a PCP scheme it should in theory be a personal contract so that you are buying the car, and not the business. In this case the business can’t claim capital allowances, in which case the accountant was right. What would then happen is you charge motoring expenses back to the business (usually full AMAP rates of 45p per business mile).

It may be that your contract isn’t a PCP, or that the finance company has actually allowed the business to enter into one.

The other scenario if you are self-employed is that a proportion of tax relief is allowable against income tax depending on the amount of business mileage versus private mileage.

David Rawlings Director, BCF Wessex

 

Need more help with business car finance? Read these:

Share this article

Facebook
Twitter
LinkedIn
WhatsApp
Reddit
Email

Want more motoring news?

Sign up here for our free weekly serving of motoring.

Sign up here for our free weekly serving of motoring.

Matt Morton

Matt Morton

Matt Morton is an automotive content writer for Business Car Manager

Latest news

Top