Car allowance, CHP and Tax.

[jampac]

Just started a job that has a car allowance of 20k. Been trying to figure out the best possible way to reduce the tax I pay.

Currently I have a wrx under secured finance. I've looked to move this to commercial hire purchase. I assume this is the best option given I get a car allowance?

The next thing that is confusing me is exactly what can I claim as running costs? Currently I have the usual,

Rego, insurance, petrol, repairs, service, depreciation and loan interest. The last two are the ones confusing me.

So question, If the car is under Commercial hire purchase can I claim depreciation? Under the same scheme, what can I claim on the part of the lease payments?

[cya18r]

You can claim depreciation and interest under your current finance arrangement, just apply the business percentage to your costs.

If you have a lease, you claim the lease payment as your deductiuon; this replaces the interest and depreciation component of your current finance arrangement.

Unless you can get a better interest rate deal under an alternative fiance arrangement, keep it simple and leave it as is.

[jampac]

Did the sums, looks like commerical hire purchase is better after doing tax

[chino]

In what way?

[BigMuz]

Castle Hill Performance all the way.