>>It would of course be possible to offset against the business but in doing so it would incur
>>bik as a "company" car.
Not so. As there is no company...
Rattle is a sole trader. As such he has a choice:
1. 40p per mile for all business mileage (up to 10k; 25p thereafter); or
2. Actual cost. To calculate this, take the total annual miles, and the business annual miles. And the total cost, including capital allowances (20% per annum reducing balance basis), petrol, insurance, servicing etc. etc.
Multiply the total cost by business miles divided by total miles, that gives you your tax deduction.
Now, what if you were to buy a van (on which you can get 100% capital allowances (as AIAs) in the first year), or a very green car that gives 100% first year allowances? Well, if your private use in that first year were nil, then you would get full tax relief on the capital cost in the first year.
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