Business leases on second hand cars

[NDT]

I'm looking various options for my next car and I'm in a partnership so I have the option of putting the car through the partnership on a business lease. Is anyone an expert on this?

Is there a limit to how old a car can be put onto a business lease?
For example a three year old Range Rover will have done a lot of depreciating and might be a good option.
My 4 year old 335d might be nice to keep when it comes off PCP - would a leasing firm touch that?
Is there a firm out there which deals with more "specialist" stuff? - as an example a 10 year old Defender 110 is still worth 20k and has glacial depreciation and I've always fancied one.

Also - how does it work? Can I go and find the car privately then arrange the finance with the leasing firm separately?

Grateful for any help - or recommendations!

[Countdown]

A leasing company can't lease you an asset that you already own. Also they won't buy it off you in order to lease it back to you. So I'm pretty sure that's a non-starter.

Based on what you've written it looks like you want to put the costs of the car (depreciation, running costs etc) through your business in order to avail yourself of tax benefits. There are ways of doing this but technically you should only be putting the "business"-related costs of running the car through the accounts, not personal use costs.

TL:DR - you're a sole trader. You can either claim 45ppm or charge a proportion of the vehicle costs (capital allowances, insurance, RFL, servicing etc) as a business expense. The proportion being the same as the amount of business use.

HTH

[NDT]

Countdown said:

:
A leasing company can't lease you an asset that you already own. Also they won't buy it off you in order to lease it back to you. So I'm pretty sure that's a non-starter.

I don't know - worth checking though, after all sale and lease back is fairly standard with other large assets.

Re the tax benefits I'm only interested in the VAT benefits. The way we deal with partner cars is that we charge all the costs back to the individual partner and then expense our business miles as usual. In the past they tried the personal / business split but it was too much hassle and also unfair (partners with expensive cars effectively being subsidised by those with cheap cars)

[Nine-Eighty-Six]

If you could do this, I'm sure you'd be open to paying BIK, too - which isn't a good thing on an ageing car, as it's based on CO2 emissions and list price when new - so you could easily be a couple of hundred quid out of pocket compared with running the new equivalent.

[EVLATECOMER]

You can usually get a lease co to enter into sale and leaseback on company vehicles, providing they will be no more than 5 years old when the lease expires.

You would also need a VAT qualifying car to make it work really.

As most have said, with all the broker lease deals on german stuff it's cheaper to go new anyway on a lease. I'd suggest you ask a friendly leasing broker what "specials" they have and see what they cost per month and work backwards.

[oop north]

Nine-Eighty-Six said:

If you could do this, I'm sure you'd be open to paying BIK, too - which isn't a good thing on an ageing car, as it's based on CO2 emissions and list price when new - so you could easily be a couple of hundred quid out of pocket compared with running the new equivalent.

No such thing as benefit in kind for a self-employed person. However, some of the contract hire cost will be disallowed for income tax purposes if emissions “high” - limit was 130g but I think it may have dropped to 110 now

[Nine-Eighty-Six]

oop north said:

No such thing as benefit in kind for a self-employed person. However, some of the contract hire cost will be disallowed for income tax purposes if emissions “high” - limit was 130g but I think it may have dropped to 110 now

We don't know if he is or not - just says 'partnership', it could still be a limited company, in which case BIK will apply.

[NDT]

Nine-Eighty-Six said:

We don't know if he is or not - just says 'partnership', it could still be a limited company, in which case BIK will apply.

No, it's a partnership in the correct sense. Actually an LLP.

[Nine-Eighty-Six]

NDT said:

Nine-Eighty-Six said:

We don't know if he is or not - just says 'partnership', it could still be a limited company, in which case BIK will apply.

No, it's a partnership in the correct sense. Actually an LLP.

I'm sure as an LLP, you'll be liable to BIK on a company owned vehicle.

[NDT]

Nine-Eighty-Six said:

I'm sure as an LLP, you'll be liable to BIK on a company owned vehicle.

Not when all the costs are passed through to me. I can walk upstairs to a floor full of tax advisers if I need help on this!