Need a bigger car for my business. Can my LTD company..
Discussion
..buy/finance a used car.
Basically i have recently started up my own company (selling soft furnishings online) and it has grown bit quicker than i expected and could do with a bigger car to fit stock in etc.. I don't need a van, i just need something bigger than Audi A3. I don't really want to lease as for something E-class sized would be too high payment. I'm thinking of a used V70/E-class/Subaru Outback for about the £13k mark.
How does it work with regards to my company. Can the finance be in the companys name? Will anyone finance a car with a new company? Is this even something you can do?
I am going to ask my accountant what to do next week but thought id see if anyone has any experience or tips!
ETA The car is used for taking dogs to the park and the odd trip out but mostly business use, about 150-200miles a week.
Basically i have recently started up my own company (selling soft furnishings online) and it has grown bit quicker than i expected and could do with a bigger car to fit stock in etc.. I don't need a van, i just need something bigger than Audi A3. I don't really want to lease as for something E-class sized would be too high payment. I'm thinking of a used V70/E-class/Subaru Outback for about the £13k mark.
How does it work with regards to my company. Can the finance be in the companys name? Will anyone finance a car with a new company? Is this even something you can do?
I am going to ask my accountant what to do next week but thought id see if anyone has any experience or tips!
ETA The car is used for taking dogs to the park and the odd trip out but mostly business use, about 150-200miles a week.
V8mate said:
You're going to use the same car for moving soft furnishings as taking the dogs to the park?
Yup everything is packaged in plastic bags when picked up from the suppliers and then they are in mailing bags and then mail sacks when taken to the sorting office. The little dogs also have a blanket to go on when they go to the park so don't worry no dog germs.In the voice of Sgt Wilson from "Dad's Army" - "Do you think that's wise?".
There are no laws preventing a company from buying a car that it's director or employees can drive. There is also no law prohibiting a company from taking on the finance relating to such a car.
HOWEVER, before proceeding down this route have a detailed discussion with your accountant about the Corporation Tax, Capital Allowance, personal tax and Class 1A National Insurance (think PAYE/Benefits in Kind) implications.
There are no laws preventing a company from buying a car that it's director or employees can drive. There is also no law prohibiting a company from taking on the finance relating to such a car.
HOWEVER, before proceeding down this route have a detailed discussion with your accountant about the Corporation Tax, Capital Allowance, personal tax and Class 1A National Insurance (think PAYE/Benefits in Kind) implications.
Yes, the car can be bought by the company. Whether you get approved for a loan or finance though depends on quite a few factors, and you'd probably need proof of earnings and possibly a business plan & trading accounts. You might be able to get an unsecured loan, but I suspect not.
The only thing to be aware of is that you will attract benefit in kind as it's a company car. This is based on the car's list price when new, regardless of the value of the car now.
You might find it becomes cost prohibitive to do this, and indeed it's most likely to be more cost effective to buy it privately and charge 45 pence per mile to the company (for the first 10,000 miles).
I'm not sure I'd bother with a company car in your situation.
The only thing to be aware of is that you will attract benefit in kind as it's a company car. This is based on the car's list price when new, regardless of the value of the car now.
You might find it becomes cost prohibitive to do this, and indeed it's most likely to be more cost effective to buy it privately and charge 45 pence per mile to the company (for the first 10,000 miles).
I'm not sure I'd bother with a company car in your situation.
Super Slo Mo said:
You might find it becomes cost prohibitive to do this, and indeed it's most likely to be more cost effective to buy it privately and charge 45 pence per mile to the company (for the first 10,000 miles).
We do this...I would consider a personal lease too... Buying a £13k used car is all well and good, but what if it needs £1000 spending on it next MOT?
You can lease a nice decent sized estate car for a couple of hundred quid a month, yes you don't own it, but it's also brand new and under warranty, so no unexpected costs, which can be useful when trying to grow a new business and keeping cash in the bank is key.
Eric Mc said:
What about the option of a van - or at the very least, a proper "commercial vehicle"? Things can work out very differently if you explore that particular option.
That is another thing. A friend has the latest Izuzu pick up. Which i have thought about as i live in rural area the 4x4 aspect would be good and the high load area means i am not bending over as much.. Shifting 200kg of bedding into the back of a hatchback does get tiring!Dr Interceptor said:
We do this...
I would consider a personal lease too... Buying a £13k used car is all well and good, but what if it needs £1000 spending on it next MOT?
You can lease a nice decent sized estate car for a couple of hundred quid a month, yes you don't own it, but it's also brand new and under warranty, so no unexpected costs, which can be useful when trying to grow a new business and keeping cash in the bank is key.
Yeah thats one thing that is worrying me about the audi, I am carrying quite abit of weight in it and i just think to myself one day somethings going to break and eat into my profits!!I would consider a personal lease too... Buying a £13k used car is all well and good, but what if it needs £1000 spending on it next MOT?
You can lease a nice decent sized estate car for a couple of hundred quid a month, yes you don't own it, but it's also brand new and under warranty, so no unexpected costs, which can be useful when trying to grow a new business and keeping cash in the bank is key.
elephantstone said:
Eric Mc said:
What about the option of a van - or at the very least, a proper "commercial vehicle"? Things can work out very differently if you explore that particular option.
That is another thing. A friend has the latest Izuzu pick up. Which i have thought about as i live in rural area the 4x4 aspect would be good and the high load area means i am not bending over as much.. Shifting 200kg of bedding into the back of a hatchback does get tiring!Dr Interceptor said:
We do this...
I would consider a personal lease too... Buying a £13k used car is all well and good, but what if it needs £1000 spending on it next MOT?
You can lease a nice decent sized estate car for a couple of hundred quid a month, yes you don't own it, but it's also brand new and under warranty, so no unexpected costs, which can be useful when trying to grow a new business and keeping cash in the bank is key.
He might struggle to get underwritten on a personal lease as his company is quite new, going from his first post. I would consider a personal lease too... Buying a £13k used car is all well and good, but what if it needs £1000 spending on it next MOT?
You can lease a nice decent sized estate car for a couple of hundred quid a month, yes you don't own it, but it's also brand new and under warranty, so no unexpected costs, which can be useful when trying to grow a new business and keeping cash in the bank is key.
Must admit i have just been checking out some deals on small vans. Top of the range transit connect (think based on a focus?) with about every toy i would want and not too big so wouldn't be an eye sore. Problem with the pick up is I'm a little unsure on the fuel bills! Need to persuade the Mrs to buy the audi off me so i can avoid trading it in/we buy any caring it and having to pay £2000 towards settlement figure!
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