We are very new to the world of self-employment and are looking for some advice on claiming a car as a business expense. My spouse is the small business owner, but I am the person who pretty much exclusively drives our car.
We are looking to purchase a new vehicle (actually a used car for which we will pay cash) and we plan to put the business logo on the side. However, it will rarely be used for business purposes, it will mostly be used as the family vehicle with me as the driver.
How should we go about at least partially claiming this as a business expense?
-Does my spouse need to be the primary owner? I own our current car, but I assume the owner of the car that is claimed as an expense must also be the one who owns the business.
-Can we claim (A) e.g. 20% of the purchase cost as a business expense, or (B) can we claim 100%?
-Going forward, if (A) is true, would we also be able to claim all petrol, repairs, new tires, etc. at the same 20%? Or perhaps 100% of maintenance costs, but petrol only in proportion to how often the car is used for the business?
I don't want to do anything dishonest, but I am trying to maximize what we claim as business expenses in order to reduce our tax burden.
Thanks a lot in advance for your advice!
is the company a GmbH or other?
Claim everything as business expense, the Swiss arer far less anal than the UK about such trivial things.
At the end of the year, i think, it is 8% of the cars value gets added to your private tax declaration as the value of having a company car.
Don't over complicate life
I have another related question: my spouse is actually just self-employed, registered in the Registre de Commerce, but not an incorporated business. There are no employees.
On the Service de la Navigation website of Vaud, as well as comparis, the information pertaining to purchasing a car for business purposes seems to be geared towards larger corporations that might have a fleet of designated vehicles owned by the business, and not owned by an individual. But in our case it's just a self-employed person who wants to purchase a car that will serve both for work-related trips, and personal use. We would like to maximize what we can deduct for tax purposes.
My assumption is that my spouse be the one to purchase, register, and insure the car, and the money for these three things should come out of the business account.
To me the unclear thing is how insurance should work as the vehicle serves two purposes: does we obtain business insurance, or since my spouse is self-employed and the business isn't incorporated, do we obtain personal insurance instead, with me as the secondary driver?
Many thanks in advance for your help...
The business purchases and insures the vehicle.
Depending on your use will determine the insurance premium. Their will be little difference if you insured it privately or company and you tell the insurance cmpany that 20% will be for business use.
As i already said, you are totally over complicating this; get the car on the business and it will be considered as a "perk" for your private use and you are taxed a small amount accordingly.
Ask an accountant
I am self-employed, registered as as a one-man show (indeĢpendant, personal liable) with the chamber of commerce in VD.
We have two cars in our household. One delivery van and one family car.
The delivery van is registered to the business, with my name and my company's name on the grey card. All costs inc. depreciation go through my profit and loss account.
The family car' costs/expenses, also go through my company's account. This incl depreciation, fuel, insurance, tax & maintenance. This car is registered to my personal name.
These deducible costs for the commercial use of private vehicles are allowable. At year-end you will have to only add a fixed CHF 1800 gain back to your PnL as a forfait. This generally is less than the costs you incur for your vehicle.
I would really suggest getting an accountant. If you want I can recommend an english speaking one, in the area. Our experience is that what you spend on an accountant/fiducaire always pays back in paying less taxes, or wasting less time answering requests from the tax office.
1) It's not a fixed sum but a percentage (i think 8%) of the new value of the car.
2) The tax office are highly unlikely to accept a one man show having 2 vehicles going through the company. When you put petrol in a vehicle nobody can determine which vehicle it went in, but other expenses are easily detected......
3) Spot on for an accountant, what it will cost you, you will easily save. The tax office also will not be so keen to contest everything if it is done via a Swiss accxountant as it is far more likely to be right then wrong, but if you do it.........