Repaying BB loan v buying a Tesla?

[Ken Figenus]

Got a £30k Business Bounce Back Loan this time last year and have managed to retain most of it - very good to know it was there when business dried up for 4 months but didn't want to use it to pay tax PLUS interest on any drawings to feed the kids so it's mostly intact.

Now I have an option to repay it all or use it for business investment. Knowing that cap ex allowance is 130% for 12 months and that BIK is 0% its seems the government would like me to propel by electrons!?

Am I right and if so does it make sense to get a Tesla as a business car - will they hit me for BIK in later years maybe (currently I claim business mileage).

Cheers

[Zoon]

Ken Figenus said:

Got a £30k Business Bounce Back Loan this time last year and have managed to retain most of it - very good to know it was there when business dried up for 4 months but didn't want to use it to pay tax PLUS interest on any drawings to feed the kids so it's mostly intact.

Now I have an option to repay it all or use it for business investment. Knowing that cap ex allowance is 130% for 12 months and that BIK is 0% its seems the government would like me to propel by electrons!?

Am I right and if so does it make sense to get a Tesla as a business car - will they hit me for BIK in later years maybe (currently I claim business mileage).

Cheers

BIK will definitely increase on EV's once the tax take on company cars drops too much.
Be careful with capital expenditure as there will be tax to pay on disposal, although looking at the depreciation on Teslas not that much hopefully.

[Ken Figenus]

Thanks Zoon. Hadn't thought of that one cap ex on disposal (never used this route before) so thanks.

So say you fund a £100k car and set £130k against tax, when you sell it in x years for £50k you will owe corp tax on that £50k asset you realised - even if goes to pay off a car loan debt and you have no cash at hand?

How many times have I looked into a car through the business and just given up!!??

[Seventy-Eight]

Ken Figenus said:

Thanks Zoon. Hadn't thought of that one cap ex on disposal (never used this route before) so thanks.

So say you fund a £100k car and set £130k against tax, when you sell it in x years for £50k you will owe corp tax on that £50k asset you realised - even if goes to pay off a car loan debt and you have no cash at hand?

How many times have I looked into a car through the business and just given up!!??

There's no 130% 'super deduction' available on cars

[Silverage]

Seventy-Eight said:

There's no 130% 'super deduction' available on cars

Indeed. You can write off 100% of the cost against profits in the first year. It comes back when you sell the car though, so you’re really only saving tax on the depreciation.

[Ken Figenus]

Super clear - thanks!