Finance.

Honest John Back Room » Motoring discussion
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Wed 8 Sep 2010 06:25
Finance. - karl66

Hi, i'm about to borrow about £8000 towards our next car, i am self employed and was wondering if it makes a difference to how much you can claim back, wether i take out a personnal loan or have straight hp with the dealer. On £8K the total amount of interest payable is £963pounds, and going with dealer finance its £1220 interest. I am not vat registered. thanks.

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Wed 8 Sep 2010 21:21
Finance. - Dutchie

Is the car going to be for your own use or your business? You could give H.M.R.C a ring custom helpline.Or try to lease a car.A accountant would be hepfull.Iam not sure if it makes a difference bank loan or dealer loan.I would go for the lower interest loan unless you have a good part exchange offer from the dealer for your old car.

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Thu 9 Sep 2010 04:29
Finance. - leaseman

I presume that you mean by "claim back" the amount of tax relief available to you.

By both HP and by loan finance (as well as Conditional Sale, Lease Purchase and Contract Purchase), you are the beneficial owner of the car and the tax treatment is exactly the same for either method. This includes tax relief on the interest paid as well as depreciation, running costs etc.

If the car is new or a VAT Qualifying car (ex-Demo, ex Hire Car etc.) then it may be worth exploring Contract Hire where tax relief could be more beneficial to you.

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