I am a sole trader landlord and rent out and self-manage my own properties. I am about to purchase a new car. What can I claim as expenses in my accounts or allowances if I obtain it with: 
(a) cash; (b) a loan; (c) a lease-purchase agreement; (d) a personal contract purchase (PCP) with a balloon payment at the end to keep it or just walk away; (e) HP? 

Arthur Weller replies:  

See HMRC’s Property Income manual at PIM22220 (www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2220), which states that a landlord has the option of: (a) claiming a fixed-rate mileage deduction for business mileage; or alternatively (b) actual running costs plus capital allowances for the car. Where the option of claiming capital allowances is chosen, it does not make a difference how the car is purchased. Usually, the HP or finance charges are allowable as a business expense. If profits are calculated on the cash basis, there are different rules. See PIM2220, where it states: ‘Capital expenditure on providing the means to travel (usually a car or van) isn’t deductible in computing rental business profits; nor is a depreciation charge. But plant and machinery capital allowances may be available. These allowances are deducted in computing the business profit or loss. The ‘wholly and exclusively’ rule applies to these allowances but, as with revenue expenditure, the landlord can claim the business proportion of the allowances. Plant and machinery allowances on cars costing more than £12,000 are also further restricted.’