Business Lease payments made personally - Tax implications
Discussion
I'mlooking to pull the trigger on the 335d Xdrive GT deal. However, the deal is a Business Only lease.
I have my own business that's also VAT registered and I'm hoping someone can give me some advice on the following.
Ideally would it be possible to sign the lease in the company name. I'll pay the deposit and premiums personally from my own bank account and will not claim the VAT, thereby treat the vehicle as my own allowing me to claim the 45ppm for business mileage and not be liable for company car tax?
I have my own business that's also VAT registered and I'm hoping someone can give me some advice on the following.
Ideally would it be possible to sign the lease in the company name. I'll pay the deposit and premiums personally from my own bank account and will not claim the VAT, thereby treat the vehicle as my own allowing me to claim the 45ppm for business mileage and not be liable for company car tax?
No tax implications.
Can't you simply get the same lease as a Personal Contract Hire? My (limited) understanding was that the main reason why people opted for business leases were the VAT advantages. If you're not intending to take advantage of these why not simply go down the PCH route?
Can't you simply get the same lease as a Personal Contract Hire? My (limited) understanding was that the main reason why people opted for business leases were the VAT advantages. If you're not intending to take advantage of these why not simply go down the PCH route?
Countdown said:
No tax implications.
Can't you simply get the same lease as a Personal Contract Hire? My (limited) understanding was that the main reason why people opted for business leases were the VAT advantages. If you're not intending to take advantage of these why not simply go down the PCH route?
The offer is Business only unfortunately, otherwise I'd take it personally Can't you simply get the same lease as a Personal Contract Hire? My (limited) understanding was that the main reason why people opted for business leases were the VAT advantages. If you're not intending to take advantage of these why not simply go down the PCH route?
T16OLE said:
I'mlooking to pull the trigger on the 335d Xdrive GT deal. However, the deal is a Business Only lease.
I have my own business that's also VAT registered and I'm hoping someone can give me some advice on the following.
Ideally would it be possible to sign the lease in the company name. I'll pay the deposit and premiums personally from my own bank account and will not claim the VAT, thereby treat the vehicle as my own allowing me to claim the 45ppm for business mileage and not be liable for company car tax?
I have my own business that's also VAT registered and I'm hoping someone can give me some advice on the following.
Ideally would it be possible to sign the lease in the company name. I'll pay the deposit and premiums personally from my own bank account and will not claim the VAT, thereby treat the vehicle as my own allowing me to claim the 45ppm for business mileage and not be liable for company car tax?
So you want the company to enter a legal agreement to lease the car and then claim that the car is actually yours?
I'd be horrified if an accountant/auditor let this go.
Good Luck if you get inspected.
TooLateForAName said:
So you want the company to enter a legal agreement to lease the car and then claim that the car is actually yours?
I'd be horrified if an accountant/auditor let this go.
Good Luck if you get inspected.
Obviously I'm not going to do anything that's not correct or legitimate.
CaptainSlow said:
A longer winded but more transparent way would be for the company to pay the lease installments and then for you to reimburse out of your net pay via payroll. Also make sure you reimburse for any other costs...maintenance etc
That would work for me, but would i be liable for company car tax and able to claim business milage?CaptainSlow said:
T16OLE said:
That would work for me, but would i be liable for company car tax and able to claim business milage?
Obviously make sure your accountant is on board. If you make a 100% reimbursement then there would be no BIK. Yes to claim mileage.Also who would be the RK? I imagine it would need to be the company and I've seen comments that, for no obvious reason, insurers really don't like this.
Sheepshanks said:
I don't think it's that straightforward - there is a Tribunal case where Directors got spanked for doing this, although there was some element of deception, IIRC.
Also who would be the RK? I imagine it would need to be the company and I've seen comments that, for no obvious reason, insurers really don't like this.
It is this straight forward. Making personal contributions to reduce BIK on cars is not uncommon. There could be an argument that the employee is benefiting from the company's purchasing strength (ie the better lease amount) and should incur a BIK on that but I've never come across this in this circumstance.Also who would be the RK? I imagine it would need to be the company and I've seen comments that, for no obvious reason, insurers really don't like this.
Also, the RK is likely to be in the name of the leasing company, so an irrelevant comment.
TooLateForAName said:
So you want the company to enter a legal agreement to lease the car and then claim that the car is actually yours?
I'd be horrified if an accountant/auditor let this go.
Good Luck if you get inspected.
CaptainSlow said:
It is this straight forward. Making personal contributions to reduce BIK on cars is not uncommon. There could be an argument that the employee is benefiting from the company's purchasing strength (ie the better lease amount) and should incur a BIK on that but I've never come across this in this circumstance.
You'll probably turn out to be an expert, but I thought that, while what you say about BIK is generally true, it specidoesn't apply to cars? Or at least, HMRC doesn't want it to.CaptainSlow said:
Also, the RK is likely to be in the name of the leasing company, so an irrelevant comment.
The lease company would be the owner but normally the company leasing the car would be the RK, although this does seem to vary. If you tried to get normal, personal, car insurance then at the very least you might have to be economical with the truth.Sheepshanks said:
You'll probably turn out to be an expert, but I thought that, while what you say about BIK is generally true, it specidoesn't apply to cars? Or at least, HMRC doesn't want it to.
I'm an accountant with experience working for a large car lessor, I wouldn't describe myself as an expert though which is why the OP needs to talk to his own beany.Sheepshanks said:
The lease company would be the owner but normally the company leasing the car would be the RK, although this does seem to vary. If you tried to get normal, personal, car insurance then at the very least you might have to be economical with the truth.
It may vary but the lessor I worked for had their name on the V5s, this is the industry norm (it's easier from an admin perspective, reduces the number of owners and also bring in some nice fines management income. CaptainSlow said:
I'm an accountant with experience working for a large car lessor, I wouldn't describe myself as an expert though which is why the OP needs to talk to his own beany.
I can't find the case I was thinking of (although, like I said, I think there were dodgy dealings anyway). HMRC did lose (twice) against Apollo Fuels - so they promptly changed the law. However the way I read it was that Apollo were leasing their own cars to employees so not sure if that makes it different.CaptainSlow said:
It may vary but the lessor I worked for had their name on the V5s, this is the industry norm (it's easier from an admin perspective, reduces the number of owners and also bring in some nice fines management income.
I suppose if that was the case then private individuals might get away with personal policies unless the insurance company digs into whose name the lease is in. But it's dodgy as strictly speaking the OP as a private individual has no financial interest in the car. I suspect that many people who do this simply don't realise that it's an issue.Oh, and not showing the lease in the company accounts would be breaking the law. Again, though, I bet it's not that unusual.
JBM78 said:
You need to reimburse the BIK, not the lease payments.
I'm glad somebody else round here gets it.Make your company party to a lease contract = BIK. No way around it. Do it and you're taking a big risk.
It's so f
king easy to sign a personal lease and reimburse at 45/25p - why does anyone ever need to try and involve a company.theboss said:
JBM78 said:
You need to reimburse the BIK, not the lease payments.
I'm glad somebody else round here gets it.theboss said:
- why does anyone ever need to try and involve a company.
Read the first line of the OP's OP.Sheepshanks said:
I suppose if that was the case then private individuals might get away with personal policies unless the insurance company digs into whose name the lease is in. But it's dodgy as strictly speaking the OP as a private individual has no financial interest in the car. I suspect that many people who do this simply don't realise that it's an issue.
Oh, and not showing the lease in the company accounts would be breaking the law. Again, though, I bet it's not that unusual.
OK so now you're moving away from the OP not being the RK being a problem for an insurer to the OP not being on the lease docs. If it were an issue, then it may be worth investigating for the company paying the premium to be fully reimbursed by the OP.Oh, and not showing the lease in the company accounts would be breaking the law. Again, though, I bet it's not that unusual.
If it were an operating lease, the lease payments would go through the P&L to be offset by the employee payments so nothing would show in the accounts.
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