Can I pay personally for a business lease?

[Noel1983]

Hi all
I have my own ltd company that’s vat registered so I can qualify for business leases ok.

However for various reasons (BIK, financial situation etc) I don’t actually want the payments to come from the company bank account or be paid for by the company.

So, is there any reason why I can’t apply for a deal in the company name to get any preferential deal for business and then simply put personal sort code and account number for the direct debit payments?

Cheers
Noel

[nunpuncher]

Probably best to call a lease company and ask them.

[Integroo]

This would be tax evasion.

[Noel1983]

Why?

If the business isn't paying for it then why is it in any way tax evasion?

If I get the business to pay for it and don't declare the BIK then yes that's tax evasion.

I'm talking about simply putting the agreement in the company name to access any deals that happen to be better for businesses than personal.

HMRC wouldn't give two hoots about that. I'm paying for the car with after tax income with all taxes paid.

[Noel1983]

nunpuncher said:

Probably best to call a lease company and ask them.

Fair point!
Spoke to Nationwide, the woman I spoke to said you have to/should use the business bank account but she's not sure how they'd know whether it was a business bank account or not.

I bank with Santander and the sort code is the same as my personal accounts and business accounts.

[plasticpig]

Integroo said:

This would be tax evasion.

Not it wouldn't. You can make a 100% employee contribution towards the cost of the lease. If you deduct this from net salary then there is no way HMRC can claim any tax is being evaded. In a lot of circumstances this would actually cost the employee more than BIK. Where it doesn't is on high value and high emissions cars like a SDV8 Range Rover.

[anonymous-user]

Tread carefully. If the lease is in the company name, it is a company car.

That will be hmrc’s starting point

Here is a relevant case

http://www.tearlecarver.co.uk/tribunal-accountants...

[Noel1983]

Thanks all, appreciate the input. From what Nationwide said they say there's not many deals that are 'better' for businesses anyway so hopefully a moot point.

Cheers

[plasticpig]

JPJPJP said:

Tread carefully. If the lease is in the company name, it is a company car.

That will be hmrc’s starting point

Here is a relevant case

http://www.tearlecarver.co.uk/tribunal-accountants...

That doesn't state if the directors paid the costs from gross or net salary.

[anonymous-user]

plasticpig said:

That doesn't state if the directors paid the costs from gross or net salary.

Net (ish)

The full tribunal finding is here

http://www.bailii.org/uk/cases/UKFTT/TC/2010/TC004...

TLDR

47. The Tribunal found that even if there had been such an agreement, the legislation was not concerned with agency or any other law. It stipulated the correct tax treatment to be used when an employer provides a car for its employees. The contract was in the name of the Company, the legislation was satisfied and so a benefit arose.

[plasticpig]

JPJPJP said:

Net (ish)

The full tribunal finding is here

http://www.bailii.org/uk/cases/UKFTT/TC/2010/TC004...

TLDR

47. The Tribunal found that even if there had been such an agreement, the legislation was not concerned with agency or any other law. It stipulated the correct tax treatment to be used when an employer provides a car for its employees. The contract was in the name of the Company, the legislation was satisfied and so a benefit arose.

Thanks for the link. My company received very similar advice to what the company in that case was given very recently. Luckily we didn't actually go down that route despite the savings the company would make on Class 1A NIC.

[anonymous-user]

A different scheme, with a different outcome

http://taxandchancery_ut.decisions.tribunals.gov.u...

[tickedon]

plasticpig said:

Not it wouldn't. You can make a 100% employee contribution towards the cost of the lease. If you deduct this from net salary then there is no way HMRC can claim any tax is being evaded. In a lot of circumstances this would actually cost the employee more than BIK. Where it doesn't is on high value and high emissions cars like a SDV8 Range Rover.

If a company buys a car, and the employee pays 100%, you are correct there is no bik etc. However, if a company leases a car, and an employee pays the leasing amount, bik etc. still apply as normal. The only payments from an employee to an employer which reduce bik are contributions to the capital cost of the car - which isn’t possible if the vehicle is simply leased by the company.

[PistonBroker]

Not a clue I'm afraid OP, but I'm trying to think of any deals I've spotted where the business lease was better than the personal lease anyway.

The Tiguan we had and the Disco Sport we have now just amounted to exactly the same as business monthly + VAT.

[mrunderhill]

In the Best Lease Car Deals Available thread there was mention of a M140i Shadow Edition from BMW Chandlers Brighton which was business users only, but "If you get a car allowance through work you are eligible too."

You could get your accountant to set aside some of your salary as car allowance. It sounds like the tax paid is all the same, just under different headings.
https://www.pistonheads.com/gassing/topic.asp?h=0&...

[R500K]

plasticpig said:

Integroo said:

This would be tax evasion.

Not it wouldn't. You can make a 100% employee contribution towards the cost of the lease. If you deduct this from net salary then there is no way HMRC can claim any tax is being evaded. In a lot of circumstances this would actually cost the employee more than BIK. Where it doesn't is on high value and high emissions cars like a SDV8 Range Rover.

another reason you should take advice from an accountant and not a random forum post

[plasticpig]

R500K said:

another reason you should take advice from an accountant and not a random forum post

That advice came from someone who is a member of the CIOT.

[Vee]

Business deal normally means they quote the exc VAT price on the basis it can be claimed back by the business. Obviosly that can only happen if the business somehow pays for it.
There are some deals which are ‘open to business users only’. If you apply for this as the business, but then the payments come out of your own account, who is to know ? Potentially the lease company might expect the account name on the direct debit to be the business name. No other way of them knowing is there ?