Most frugal way to buy a car through a business
Discussion
Hi Pistonheads,
I hope you're all keeping well.
Can anyone please give advice on the most frugal way to purchase/lease a car through a business?
I'm asking on behalf of my parents who have run a successful business for the past 25+ years but aren't really up to date on what the tax incentives/rules/laws etc are with purchasing cars through a business. Currently they own older used vehicles out-right. They have a good accountant but he's very busy and sometimes isn't the most willing with giving advice on these types of issues - tbh I think they're struggling to ask him the right question. They would need to use the car for both business and personal use.
A pick-up truck would be genuinely useful for their field of work. Else are there any incentives linked to electric vehicles?
Many thanks.
I hope you're all keeping well.
Can anyone please give advice on the most frugal way to purchase/lease a car through a business?
I'm asking on behalf of my parents who have run a successful business for the past 25+ years but aren't really up to date on what the tax incentives/rules/laws etc are with purchasing cars through a business. Currently they own older used vehicles out-right. They have a good accountant but he's very busy and sometimes isn't the most willing with giving advice on these types of issues - tbh I think they're struggling to ask him the right question. They would need to use the car for both business and personal use.
A pick-up truck would be genuinely useful for their field of work. Else are there any incentives linked to electric vehicles?
Many thanks.
trickywoo said:
In the simplest terms brand new fully electric would save loads of tax.
If the accountant can’t give simple up front advice I’d not be that confident in them accounting for it correctly re the corp tax.
Thanks for responding. Yeah my googling also seemed to suggest that this is the best way forward. If the accountant can’t give simple up front advice I’d not be that confident in them accounting for it correctly re the corp tax.
If they need any vehicle that can be classified as a commercial vehicle, that is also worth pursuing. Note that HMRC’s definitions of vehicles are constantly changing and also there are always tax cases where HMRC disputes how a business has defined a vehicle.
Note also that tax and VAT rules are not fully aligned.
Finally, there are also PAYE rules to be aware of.
It’s not straightforward at all.
As I sad previously and has been emphasised by another post, the current accountants seem rather poor to say the least.
Note also that tax and VAT rules are not fully aligned.
Finally, there are also PAYE rules to be aware of.
It’s not straightforward at all.
As I sad previously and has been emphasised by another post, the current accountants seem rather poor to say the least.
As people are saying they need a better accountant..
You need to know their specific numbers and requirements to make the best judgment, also assume they are VAT registered, this will make a difference
Buying outright vs leasing will also have an impact.
The two options with a benefit are a pickup that qualifies as a commercial vehicle (check the payload and vehicle gross weight) or an electric car
If they have a use for a pickup type of vehicle, these have a fixed BIK amount, and the value can be calculated fairly easily.
An electric car has very low BIK and can be good value for a business
Any decent accountant should be able to run the numbers against their business and work out the benefit for each option.
Sounds like they have a book keeper rather than an accountant.
You need to know their specific numbers and requirements to make the best judgment, also assume they are VAT registered, this will make a difference
Buying outright vs leasing will also have an impact.
The two options with a benefit are a pickup that qualifies as a commercial vehicle (check the payload and vehicle gross weight) or an electric car
If they have a use for a pickup type of vehicle, these have a fixed BIK amount, and the value can be calculated fairly easily.
An electric car has very low BIK and can be good value for a business
Any decent accountant should be able to run the numbers against their business and work out the benefit for each option.
Sounds like they have a book keeper rather than an accountant.
Good luck with them finding a good accountant. Over the last 24 years I've only had two, but amongst my circle of friends there have been numerous and none of them have ever given any tax advice whatsoever. I sacked my last accountant because I got sick and tired of him trying to sell me insurance produces and the latest accountant has got extremely poor communication skills.
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