I’m self-employed: what’s the most tax-efficient way to run my business car?

Optician needs advice on self-employed tax position and business cars

I’M a self employed optician and I work between two practices so I clock up around 900 miles a month for work and probably 25-50 miles for personal use if that.

Most of my driving is town driving (not in central London) and about 100 is motorway. My current car was purchased outright eight years ago and needs replacing.

I’m looking at the new Golf MK6 and I’m thinking of either the diesel (CO2 emission 123g/km) or the BlueMotion (CO2 emission 109g/km).

I don’t mind a brand new car or a car that’s one-two years’ old – my decision will be influenced by the most tax efficient option! Budget is around £20k.

I’m unsure how the tax rules apply to me so I don’t know what I can claim and what I can’t? Any help in this matter would be greatly appreciated. I’m not VAT registered and currently do my own tax returns.

Paul Bulloch, managing director of Concept Vehicle Leasing, is our expert on self-employed and business car tax.

As self-employed, you can claim 100% of all your motoring expenses with a restriction of 20% for the private mileage element – HMRC won’t accept much less than that unless you can prove categorically your business versus private mileage with detailed daily logs.

As for the capital allowances on your purchase, it would be more tax efficient to choose the VW Golf Bluemotion, because cars with CO2 emissions below 110g/km qualify for 100% capital allowances in the first year – again with the 20% restriction for the private mileage element.