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I’m a sole trader, so what’s the best way for me to run my car on business?

YOU don’t have to be a company to run your car through the business. Accountant Tim Heaton explains some of the advantages sole traders enjoy by putting the running costs of their cars through the business accounts.

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1 November 2006

Sole trader tax advice on business motoring costs and what to claim

Sole traders: claim business costs

By Tim Heaton, The Tax Partnership

IF YOU are a sole trader, all you car running costs can be met by the business, provided all private motoring elements are deducted.

That’s because the tax position of the sole trader is very different to the limited company (see I run my own company: how should I run my vehicles?).

If you are a sole trader, your business only exists as a trading medium.

It does not ‘exist’ as a separate entity – like a limited company.

Therefore, a trader can keep a car (or van) in their own name on the registration V5 document.

All the running costs can be paid for by the business. Then the trader

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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