Please help me understand buying a used car in a company nam

[stef1808]

Hello

I never understood how exactly it works and so have some questions I would really loved answered;

1. Can one open a new company to buy a used car under
2. Can one open a new company to buy a used car and not increase the amount of previous owners on it
3. Is this the same abroad or depends per country ?

Really appreciate your help

Thanks

[V8forweekends]

stef1808 said:

Hello

I never understood how exactly it works and so have some questions I would really loved answered;

1. Can one open a new company to buy a used car under
2. Can one open a new company to buy a used car and not increase the amount of previous owners on it
3. Is this the same abroad or depends per country ?

Really appreciate your help

Thanks

1. Yes - but it's almost certainly pointless and possibly not strictly legal.
2. Not unless the Company is a car dealer
3. What a silly question - there are about 260 other countries in the world....

[TooMany2cvs]

stef1808 said:

3. Is this the same abroad or depends per country ?

Was this your homework over the summer holidays? Bit last minute, isn't it?

[stef1808]

TooMany2cvs said:

Was this your homework over the summer holidays? Bit last minute, isn't it?

something like that, yeah

apologies for no.3 but thanks so far

[TooMany2cvs]

Bear in mind that if the vehicle's owner and/or registered in the company name, it's going to be VERY difficult to argue it's not liable to benefit-in-kind taxation, as with any other company car.

[stef1808]

As I understand it, a self employed used car salesman/company would be exempt from BIK taxation and only liable for corporation and VAT ?

Edited by stef1808 on Tuesday 26th August 15:53

[Dr Interceptor]

If a person uses a vehicle owned or leased by a company, whether or not they are an employee of that company, they are incurring a benefit in kind (BIK) and that is taxable. They should complete a P11D and declare the benefit. Even if they are a director (owner) of said company.

[V8forweekends]

stef1808 said:

As I understand it, a self employed used car salesman/company would be exempt from BIK taxation and only liable for corporation and VAT ?

Edited by stef1808 on Tuesday 26th August 15:53

Why would a self employed person be liable for Corporation Tax?

Corporation tax is a company based tax.

BIK is a personal taxation issue - and car dealers/sellers aren't exempt. Most small traders seem to buy their own vehicle with their own money as that's the only way to avoid BIK on a company provided vehicle.

You seem quite confused about Company vs Personal tax and trading. If you think you have found some marvellous tax dodge, ask yourself why no-one's using it.

[stef1808]

V8, hope you appreciate I am confused here and trying to figure everything out.

Nop, im not looking for the next best tax avoidance scheme but rather the most efficient route to buying a classic car

[TooMany2cvs]

V8forweekends said:

Why would a self employed person be liable for Corporation Tax?

'course, if they're self employed as a sole trader, then there's no "company name" to buy the car via, anyway.

[R1 Indy]

Dr Interceptor said:

If a person uses a vehicle owned or leased by a company, whether or not they are an employee of that company, they are incurring a benefit in kind (BIK) and that is taxable. They should complete a P11D and declare the benefit. Even if they are a director (owner) of said company.

Only if used for private use.

My van is owned by my company, I don't pay BIK as only used for business use.
I have 2 personal cars to back this up with HMRC if they ever ask.

[Dr Interceptor]

R1 Indy said:

Only if used for private use.

My van is owned by my company, I don't pay BIK as only used for business use.
I have 2 personal cars to back this up with HMRC if they ever ask.

Yes, personal use.

Although it's easier to get away with vans. HMRC know that employees often take vans home, this isn't seen as a BIK. Only if they started using the van for shopping on a regular basis, or taking junior to footy on a sunday morning would they show an interest.

Company cars though are much hotter, especially so called 'pool cars'. If they go home, there's almost certainly a BIK.

[s55shh]

If its an appreciating classic a limited company owner would not enjoy any cgt allowances on future gains.