Limited company director, cars, why is it so hard?!

[S5Scot]

Limited company director, good credit history, car renewal time for business partner and I.

HRT payer, Scotland based and therefore accountant 'advice' get an all electric car as BIK will only increase in years ahead and you will get stuffed if going petrol / diesel / hybrid.

That is where the issues start. Everyone has a story, 'pub talk' of my mate does this or my mate does that. But there appears to be no straight answer about what the best tactic is. The most recent today was, take a £10k loan, that covers a lease deposit, then lease the car personally, take whatever you want fuel wise as the BIK wont matter, and maximise the mileage claim which isnt an issue doing C. 12k business 3K max personal a year.

It just feels in this day and age that there isn't any straight advice on what is best to do or why.

I definitely want a new vehicle, either lease or finance through business. Models include Eletre, Cayenne, Big Range if going all electric. Various other models if going hybrid or even petrol.

I can't surely be the only one that feels the decision is almost impossible to make due to the number of mitigating factors to consider?

[Panamax]

S5Scot said:

accountant 'advice' get an all electric car

I can't surely be the only one that feels the decision is almost impossible to make due to the number of mitigating factors to consider?

Which bit of the "advice" are you struggling with? You've been advised to get a big, electric truck as your company car.

[S5Scot]

said:

Well that is of course the easy comment, I should ellaborate there. Going all electric is one of various options, accountants appear to be blinkered, on the whole, to what is easiest and I appreciate seeking the best advice and perhaps from a better accountant is the real answer.

My quandry is, is all electric really the answer, or is taking a loan from the business under £10k to pay a deposit, then paying yourself a car allowance, and insuring the car either privately or through the business and taking a mileage rate claim on top of that really a better way?

The options seem endless, determining what is truly the 'best' option I appreciate may be relatively case specific but it feels more complicated than it should be!

[NDA]

Does the 100% capital allowance help you at all?

[S5Scot]

NDA said:

Does the 100% capital allowance help you at all?

Not something I know about and yet another thing perhaps to consider, any advice appreciated!

[trickywoo]

S5Scot said:

NDA said:

Does the 100% capital allowance help you at all?

Not something I know about and yet another thing perhaps to consider, any advice appreciated!

You could potentially write the entire cost of the vehicle off against profit in the first year.

That’s only really useful if you have profit to write off.

[jgrewal]

Honestly I gave up on BCH leasing for my Ltd company it was just so totally unclear as you say. My accountant was also pretty useless and said stuff about BIK and P11D but never really advised the most cost effective approach!

[IJWS15]

A few years ago my accountant said “don’t, get your own and claim the mileage, bik, ni and all the other issues made it cheaper and simpler”

I got a personal lease and the mileage paid for the car in its entirety.

[Nicetobenice]

Fully electric lease or hire via the company is still probably the best, unless you have a lot of spare cash and decent profits in which case buy for cash and write off the full cost.

However if your accountant can't give you decent fag packet numbers for it, you need to be changing your accountant.

[S5Scot]

Kind of glad others have experienced the same. There is a bit about me that thinks easiest thing is probably to take a car allowance and claim mileage and hopefully that C. £6,750.00 a year i would claim tax free, goes someway to paying the car. The initial deposit and taking a 10K loan etc seemed a good idea but researching it, it looks a minefield.

[PRO5T]

Can only say what I did, Defender 110 diesel Commercial and fit "temporary" and fully removable (but crucially fully "official" for insurance purposes) rear seats. VAT claim back and offset purchase cost against corp tax bill, BIK as if it were a company van. We also have a further full EV on the books as a director car with personal use allowance.

[S5Scot]

PRO5T said:

Can only say what I did, Defender 110 diesel Commercial and fit "temporary" and fully removable (but crucially fully "official" for insurance purposes) rear seats. VAT claim back and offset purchase cost against corp tax bill, BIK as if it were a company van. We also have a further full EV on the books as a director car with personal use allowance.

Thank you, the insurance quandry prevented me for entertaining that idea, the thought of having to get them ripped out prior to any claim etc.

[PRO5T]

S5Scot said:

PRO5T said:

Can only say what I did, Defender 110 diesel Commercial and fit "temporary" and fully removable (but crucially fully "official" for insurance purposes) rear seats. VAT claim back and offset purchase cost against corp tax bill, BIK as if it were a company van. We also have a further full EV on the books as a director car with personal use allowance.

Thank you, the insurance quandry prevented me for entertaining that idea, the thought of having to get them ripped out prior to any claim etc.

Admiral multi-car policy accepted the certificate provided by Stirling Automotive for the conversion. All was above board, mine even has 6 seats as I optioned the third jump seat up front.

To be fair they are hardly ever used, the vehicle is primarily a work horse for the business and they are needed to be folded flat 360 days of the year. But on the rare occasion they are needed, I can see why company directors simply use it as a dodge. Plenty of businesses have built a good trade around it.

[happytobealive]

PRO5T said:

Can only say what I did, Defender 110 diesel Commercial and fit "temporary" and fully removable (but crucially fully "official" for insurance purposes) rear seats. VAT claim back and offset purchase cost against corp tax bill, BIK as if it were a company van....

Clever idea. Not heard of that before.

[silentbrown]

S5Scot said:

Kind of glad others have experienced the same. There is a bit about me that thinks easiest thing is probably to take a car allowance and claim mileage and hopefully that C. £6,750.00 a year i would claim tax free, goes someway to paying the car. The initial deposit and taking a 10K loan etc seemed a good idea but researching it, it looks a minefield.

55p/mile for the first 10K, then 25p/mile. so £6K for 12K business miles.

Assuming its petrol/diesel, allow 25p/mile for fuel costs and at least 10p/mile for tyres/servicing, so running cost of maybe £4,200/year. The £1,800 left isn't going to come close to covering the additional mileage-related depreciation.