Buying a car for the Company.
Discussion
Stupid questions really but......
1. Do I just buy it out of the business money and register it to the business?
2. Can I can obtain insurance for this vehicle fairly easily?
3. All servicing/tax etc would be from the company money, is that right?
4. If I have a car that is in the name of the company, I can still use it for anything I like is that correct i.e. I do not have to be on business use for it?
Sorry, these things may be obvious and simple but this is all new to me!
1. Do I just buy it out of the business money and register it to the business?
2. Can I can obtain insurance for this vehicle fairly easily?
3. All servicing/tax etc would be from the company money, is that right?
4. If I have a car that is in the name of the company, I can still use it for anything I like is that correct i.e. I do not have to be on business use for it?
Sorry, these things may be obvious and simple but this is all new to me!
I was pondering this too - I'm considering buying something like a Navara or Hilux (so classed as commercial I assume) and wondered about putting it through my LTD company.
I looked on the HMRC site to get an understanding of tax implications, but it seemed to be biased towards brand new cars - I'd be looking at used (circa £6-7k).
Does the tax calculation take the purchase price, or the original list price? It wasn't clear.
I looked on the HMRC site to get an understanding of tax implications, but it seemed to be biased towards brand new cars - I'd be looking at used (circa £6-7k).
Does the tax calculation take the purchase price, or the original list price? It wasn't clear.
In regards to the above two queries, you must be 100% sure that the vehicle you are thinking of is specifically accepted by HMRC as a "Commercial Vehicle". There are quite a few types out there that look like they MIGHT be but aren't - and vise versa.
Regarding "tax implications", there are lots of taxes and lots of implications - so you need to be specific about which tax you are asking about. The three main tax areas that you need to consider are -
allowability for Corporation Tax Capital Allowances
how the vehicle is treated for personal tax Benefit in Kind purposes
whether Input VAT can be reclaimed on the purchase cost of the vehicle
Regarding "tax implications", there are lots of taxes and lots of implications - so you need to be specific about which tax you are asking about. The three main tax areas that you need to consider are -
allowability for Corporation Tax Capital Allowances
how the vehicle is treated for personal tax Benefit in Kind purposes
whether Input VAT can be reclaimed on the purchase cost of the vehicle
Jasandjules said:
The online one I saw asked only for the List Price, which is why it worked out at more tax per year than the value of the car!
This seems like a fairly decent basic explanation:https://www.mikelewis.co.uk/cars.html
It can work well if you can find a nice 70s car. List prices were low and if the current value is under 15K then it can work out very nicely tax wise.
Jasandjules said:
So a 1996 MR2 might be ok....
Depends what the new list price was as I think that is what your P11D value would be.You will pay personal tax on a percentage of the new list price, depending on what carbon banding it is given.
I doubt it would be worth it, but I may be wrong.
The car has to be over 15 years old and be bought for under £15k to qualify for BiK based on its new list price. No spunking £500k of your company's money on 4.5 litre Bentley Blower!
Over £15k purchase price and you pay based on current market value.
Note, you could probably buy a shed for £15k and restore it at company expense - I think.
Over £15k purchase price and you pay based on current market value.
Note, you could probably buy a shed for £15k and restore it at company expense - I think.
desolate said:
According to Parkers the original price was around 22K.
you need to find yourself a 70s/early 80s car with a list price in the hundreds or low thousands.
Car prices where horrific in the 90s
Yes, even a MK1 has a P11D of 15k it seems from Parkers.you need to find yourself a 70s/early 80s car with a list price in the hundreds or low thousands.
Car prices where horrific in the 90s
Can't really think of another car I might want annoyingly enough....
Jasandjules said:
Yes, even a MK1 has a P11D of 15k it seems from Parkers.
Can't really think of another car I might want annoyingly enough....
http://www.carandclassic.co.uk/car/C700887Can't really think of another car I might want annoyingly enough....
http://www.carandclassic.co.uk/car/C694563
There must be loads out there!! play the tax game correctly and it will be almost free.
I say almost, that's just how my calculator works.
I am off to ring my accountant anyway.
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