Fordon wrote:
Thank you. Could someone give some more details please?
You can claim capital allowances on the car, which basically means deducting a proportion of the cost of the car over several years from your taxable profit so it doesn't all fall in the year of purchase and nothing in later years, which would distort the profit figures.
As Lewes says the annual writing down allowance is 18%.
So 18% of £6,000 is £1,080, but as you've stated 20% private use you can only take £864 off your profit figure (80% of £1,080).
Next year you take the £1,080 off your starting balance of £6,000, which leaves £4,920.
The £4,920 balance left is then subject to the 18% writing down allowance, which is again adjusted to take account of the private use element. So £4,920 x 18% = £886. Adjusting for private use leaves £708. The £886 is then taken off the balance for next year, and so on.
Or at least that's the basic principle of the thing, but the rates may change and there can be other fiddly aspects which aren't covered above, so best ask a professional adviser or HMRC.
For example, I think you can claim more up front for a new car with low/zero emissions.