Reply To: Car Finance as Business Expense Self Employed

#163075
peterdelamothe
Keymaster

I think the process here is two fold.

Firstly, can you allow any of the charge under the “wholly and exclusive charge” rules

Secondly and if yes, apply the rules set out in the specific regs. If the car finance is really just hire purchase then the interest is allowable but the repayment of capital is not. It is up to the claimant to provide this info….how much is for what….if she cannot then you cannot allow anything.

Note allow the need to establish whether this is a new business etc…..capital expenditure is never allowable nor is expansion of the business. So if she previously had a car and has now bought a special hairdressing van then that would fail on both and none of the charges would be allowable.

Expansion of the business is always an important consideration.