LTD co and leasing car?

[IceBoy]

Hi All,

I have always purchased my cars and never leased.

I'm still not completely sure about the different options pcp, lease, business lease or whatever else.

Questions:

1. What is the best option from a ltd company tax perspective?
2. What can be off-set against profit? - The monthly payment?

Any help really appreciated.
IceBoy

[Terminator X]

Our accountant has always suggested keeping cars separate from the company as otherwise the individuals get slammed with company car tax? Leccy cars may be the obvious exception though.

TX.

[BishBosh]

Buy the car in your own name and charge mileage back to the company. 45p up to 10000 miles then 25p after that.

[TvrJohn]

claim mileage

[Zoon]

Terminator X said:

Our accountant has always suggested keeping cars separate from the company as otherwise the individuals get slammed with company car tax? Leccy cars may be the obvious exception though.

TX.

Nope, BIK has now kicked in on all EVs

[malks222]

yep, my accountant told me- unless I need the vehicle (car, pick up, van) specifically for work or I'm doing high mileage (I think >25k-30k) then basically any 'saving' the company makes on tax, you loose out personally on 'benefit in kind' tax.

electric vehicles used to be good/ tax efficient, but they have reduced and continue to reduce any tax breaks for these.

a few years back it used to be worthwhile having a commercial vehicle (hence loads of people started using twin cab pick ups!!) but they closed that avenue off too!

[Phooey]

malks222 said:

a few years back it used to be worthwhile having a commercial vehicle (hence loads of people started using twin cab pick ups!!) but they closed that avenue off too!

I thought a 'commercial' vehicle ie 1-tonne payload pick up was still a worthwhile alternative to a car? What 'avenue' have they closed?

[malks222]

Phooey said:

I thought a 'commercial' vehicle ie 1-tonne payload pick up was still a worthwhile alternative to a car? What 'avenue' have they closed?

I can't remember exactly what my accountant told me, but I think he advised that hmrc were looking for evidence that it was actually required for the job. obviously this is only an issue of investigated by hmrc. but he did say to me, you provide services predominantly office based, I'd have a hard time arguing that I needed a commercial pickup when I never need to carry materials/loads etc... to do my job

[oop north]

malks222 said:

I can't remember exactly what my accountant told me, but I think he advised that hmrc were looking for evidence that it was actually required for the job. obviously this is only an issue of investigated by hmrc. but he did say to me, you provide services predominantly office based, I'd have a hard time arguing that I needed a commercial pickup when I never need to carry materials/loads etc... to do my job

I am an accountant but don't deal with tax - my business partner who does tax investigation work told me the same - as an office based business I could not claim to need a van. The danger would be not getting a deduction in your corporation tax computation.

At the moment I have a BMW i3. Works well through the business as the moment but bik rate of 16% x list from somewhere around 2019 means it's not so likely I will get another through the company. Part of the problem is that low emission cars tend to have higher list prices so the saving is diluted

On pros / cons of different approaches, on contract hire I can claim half the vat back, as a leccy car the company can pay all charging coats with tax deduction in the company and no personal tax charge, tyres and servicing are done vat-free (for. Vat-registered business). Personally I would prefer to have the company own the vehicle as being restricted to a fixed period and mileage is a drag

[anonymous-user]

Echoing the earlier comments, my accountant looked into it with same verdict....more cost effective to keep it out the business and claim mileage