Company car.....
Discussion
No, not the normal "what should I choose lads"....
This is a bit of a different conundrum.....
I am now running a small business which means that I can go whatever is the most tax efficient/fun route. Currently we have 2 registered company cars. These cars are "pool" cars
Due to circumstances I might take on one of these "pool" cars myself, or I might opt for a company car, or I might pay myself more and run my own car or......any other schemes out there???
Thing is, if I run a "pool car" then its gonna have to be something fairly ordinary....Golf/A3 probably best I could get away with. Don't think they would swallow the Tiv for example !
If I go company car route, well I reckon a decent premium brand diseasel will cost me £170 - £200/month in tax.
Opt out?
A mate of mine runs a company car, working for a large electricity company, and apparently gets paid about £400/month, pays only about £10 tax on that , then takes out a "personal" lease. He then spends less or more than the £400 on his choice of car..........So how does that work then...???
Look forward to hearing from anyone else who's got nothing better to do today
TIA
This is a bit of a different conundrum.....
I am now running a small business which means that I can go whatever is the most tax efficient/fun route. Currently we have 2 registered company cars. These cars are "pool" cars
Due to circumstances I might take on one of these "pool" cars myself, or I might opt for a company car, or I might pay myself more and run my own car or......any other schemes out there???
Thing is, if I run a "pool car" then its gonna have to be something fairly ordinary....Golf/A3 probably best I could get away with. Don't think they would swallow the Tiv for example !
If I go company car route, well I reckon a decent premium brand diseasel will cost me £170 - £200/month in tax.
Opt out?
A mate of mine runs a company car, working for a large electricity company, and apparently gets paid about £400/month, pays only about £10 tax on that , then takes out a "personal" lease. He then spends less or more than the £400 on his choice of car..........So how does that work then...???
Look forward to hearing from anyone else who's got nothing better to do today
TIA
Westy
Pool cars are great: no benefit in kind, you can even reclaim the VAT, but remember there should be overnight parking at the office for them, as they cannot be taken home! VAT on cars is very restrictive, so most likely to be vouched on a VAT inspection.
Your mate may have a good deal on a company car, but what you have to remember is that your situation is different. You don't say whether your business is a company or not. sole trader/partnerships - you can run the car on the business, and pick up the tax saving on the business percentage. Company cars however, the company has the tax saving, but the employee is charged for the benefit. Tax on the benefit is cheap if you wanted a new car anyway, but if it is your company, the cost of the benefit increases due to the Employer's NI (class 1A) on the benefit, as well as the cost you would have incurred on a private car anyway! Technically the company is a separate entity, but if you are the only shareholder, you ARE paying the company cost personally in real life, coz it's money you cannot extract from the company any more.
You may be better off having the company pay all the bills, but debiting them to your director's loan account. Then a reciprocal charge for business mileage at FPCS (Inland Revenue set) rates should hopefully repay your loan. This way, no employee or employer taxes are added to the cost. You buy the car, but the company manages the finances for you!
The lease thing usually works around a charge to cover the mileage, which in the right circumstances, pays enough for the lease car. (usually coz the mileages claimed are, er, 'massaged'!).
I do have lots to do now, but will happily discuss details offline later if you want specifics.
Pool cars are great: no benefit in kind, you can even reclaim the VAT, but remember there should be overnight parking at the office for them, as they cannot be taken home! VAT on cars is very restrictive, so most likely to be vouched on a VAT inspection.
Your mate may have a good deal on a company car, but what you have to remember is that your situation is different. You don't say whether your business is a company or not. sole trader/partnerships - you can run the car on the business, and pick up the tax saving on the business percentage. Company cars however, the company has the tax saving, but the employee is charged for the benefit. Tax on the benefit is cheap if you wanted a new car anyway, but if it is your company, the cost of the benefit increases due to the Employer's NI (class 1A) on the benefit, as well as the cost you would have incurred on a private car anyway! Technically the company is a separate entity, but if you are the only shareholder, you ARE paying the company cost personally in real life, coz it's money you cannot extract from the company any more.
You may be better off having the company pay all the bills, but debiting them to your director's loan account. Then a reciprocal charge for business mileage at FPCS (Inland Revenue set) rates should hopefully repay your loan. This way, no employee or employer taxes are added to the cost. You buy the car, but the company manages the finances for you!
The lease thing usually works around a charge to cover the mileage, which in the right circumstances, pays enough for the lease car. (usually coz the mileages claimed are, er, 'massaged'!).
I do have lots to do now, but will happily discuss details offline later if you want specifics.
I ran the chim as a company car till they changed the tax rules...
I now run a Discovery commercial which currently means no vat on purchase, no fuel tax and only 500 quid off my allowance although this is changing to 3k soon.
you can do the same deal with the double cab pickups. saves a fortune..
g
I now run a Discovery commercial which currently means no vat on purchase, no fuel tax and only 500 quid off my allowance although this is changing to 3k soon.
you can do the same deal with the double cab pickups. saves a fortune..
g
if you end up paying as an employee the tax is based on emissions.
unlikely that the tvr will rate well in this area.
you could always go for a light car/relatively lower powered ( and of course still end up with 3-400 bhp/ton ) such as an elise or cat7?
caterham have their new models out with duratec engines, which is pretty modern, so presumably low in emissions?
the fast one is a little over 500bhp/ton, IIRC.....
but daresay that one's been mapped, so again isn't likely to be too good on emissions....bu66er.
otherwise elise/exige has 1.8VVTi which i imagine is ok
unlikely that the tvr will rate well in this area.
you could always go for a light car/relatively lower powered ( and of course still end up with 3-400 bhp/ton ) such as an elise or cat7?
caterham have their new models out with duratec engines, which is pretty modern, so presumably low in emissions?
the fast one is a little over 500bhp/ton, IIRC.....
but daresay that one's been mapped, so again isn't likely to be too good on emissions....bu66er.
otherwise elise/exige has 1.8VVTi which i imagine is ok
elise is best for emissions co car. pretty cheap on tax.
best route (imho) is to use your own car and just pay yourself mileage. i get £0.40 per mile for my griff.
being your own car it is MUCH cheaper for insurance (catB)
i have a Co car Schnitzer BMW 5 series for general use and use the Griff when i feel like it and pay myself miles.
Best of both worlds! also do trackdays with customers as entertainment/hospitality days...Wahey!
best route (imho) is to use your own car and just pay yourself mileage. i get £0.40 per mile for my griff.
being your own car it is MUCH cheaper for insurance (catB)
i have a Co car Schnitzer BMW 5 series for general use and use the Griff when i feel like it and pay myself miles.
Best of both worlds! also do trackdays with customers as entertainment/hospitality days...Wahey!
WWesty, if you go the cash route then you will pay tax at your marginal rate, your mate is paying much more than £10 month in tax on £400/month, at 40% (higher rate) it would be £160 month in tax. However add back the reduction in tax for not having a company car and the difference in take home money may well be £390 (it was for me when I took money instead of a car). This will depend on the type of company car he had previously.
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