Company city car for girlfriend who works for my company?

[Tiggsy]

I have a Ltd co and lease my car privately as it's an A45 and the BIK would be nuts.

My partner works for me as PAYE and earns enough to be into 40% tax.

She needs a car (we do....putting too many miles on the A45 lease ) and wants a little thing to get to the shops, etc

Option 1 - She leases a C1 (or similar) at about £140pm x 23+3 and uses taxed pay to fund it.


Option 2 - I lease it via the (non-VAT reg) business and offset against Corp tax - She then gets hit with the BIK (16% this year, 17% next) of a £12k car.

Am I missing something or is it far better to stick through the biz?

[singlecoil]

As a matter of interest, how can she be earning enough from a non-VAT registered business to be paying 40% tax? Does she have other sources of income?

[Eric Mc]

It might be a business sector where VAT registration is not required - even if the turnover exceeds the normal VAT registration threshold.

[anonymous-user]

A nice electric number, i3 for instance?

[Tiggsy]

As Eric says-my industry doesn't require VAT registration.

Problem with the i3 is it is a 20 K plus car-the idea here is to get a cheap little run about for spare use. On the road price under 15 K

But does the tax advantage stack up to put it through the company? As a contract hire?

[Eric Mc]

Sorting out what is correct for your company and your employees is usually too complex a question to answer with basic information. The only people who know the full circumstances are you and your accountant.

When it comes to cars/vehicles/buying/financing/leasing/Capital Allowances/Benefit in Kind etc, it's just too complex with too many variables for straightforward answers.

[KevinCamaroSS]

Another alternative would be to pay her a 'car allowance'. This would be tax deductible by the business although PAYE and NI apply to both employer and employee. An allowance of £3,600/year would net her around £175/month at 40% tax rate.

[Jim909]

Fiesta van ?

[xjay1337]

I remember Pug 208 GTI was like £120 a month on lease a while ago.

As said above we can't really advise on the best proposition due to limited infomation.
I would just get your wife to pick a car and lease it.

Could she then claim business miles for business related trips @ <45ppm?

[Broccers]

We've a C1 1.2 on personal lease for my other half - 97 a month 1 + 17 5k a year.

Thats your answer.

[rickh]

Another option you can do with a ltd company, Personally lease the car and charge the company,You can charge your company 45 pence for the first 10,000 miles per year!

45p per Mile equites to £375 per month or £4500 per year!!!!

Regards Rick

[xjay1337]

rickh said:

Another option you can do with a ltd company, Personally lease the car and charge the company,You can charge your company 45 pence for the first 10,000 miles per year!

45p per Mile equites to £375 per month or £4500 per year!!!!

Regards Rick

However don't these have to be legit business trips...?
You can't just claim 45ppm for personal mileage, commutes to work, etc.

[KevinCamaroSS]

xjay1337 said:

rickh said:

Another option you can do with a ltd company, Personally lease the car and charge the company,You can charge your company 45 pence for the first 10,000 miles per year!

45p per Mile equites to £375 per month or £4500 per year!!!!

Regards Rick

However don't these have to be legit business trips...?
You can't just claim 45ppm for personal mileage, commutes to work, etc.

Correct.