Company cars (actually owned by a company)
Discussion
I'm a Brit in the US.
I've read a lot about company cars on these boards.
Am I correct in assuming all these restrictions I read about are for employees using cars either provided or part provided for their personal use.
One restriction that drew my attention was that somebody could only have a pick up.(one tonne and one row of seats) That seems ridulous, not only couldn't you take someone out to dinner but not really even practical for picking up a couple of boxes of paper. (Rain)
Someone please tell me this does not apply to a Corp/LLC.
I've read a lot about company cars on these boards.
Am I correct in assuming all these restrictions I read about are for employees using cars either provided or part provided for their personal use.
One restriction that drew my attention was that somebody could only have a pick up.(one tonne and one row of seats) That seems ridulous, not only couldn't you take someone out to dinner but not really even practical for picking up a couple of boxes of paper. (Rain)
Someone please tell me this does not apply to a Corp/LLC.
jeff m said:
I'm a Brit in the US.
That seems ridulous, not only couldn't you take someone out to dinner
I thought these restriction were only if you don't want to pay tax on the benefit of been provided with a vehicle. To avoid the tax people say it is a commercial vehicle and is not for personal use - except commuting. Hence our housing estates are littered with white vans at the weekends.That seems ridulous, not only couldn't you take someone out to dinner
You could have any car provided by your employer, if they wish, but you then pay tax at a percentage of the value of the list price of the car. The percentage is decided by the CO2 g/km band of the car. http://www.hmrc.gov.uk/employers/ebik/ebik3/car-be...
One could instead take the money offered, pay your standard income tax and buy it as a private buyer. Depends on employer's scheme/offer.
BigAlinEmbra said:
I suspect the restriction the OP is talking about is reclaiming VAT on a vehicle, for which it needs to be a commercial vehicle.
IE a van or pick-up.
Whatever vehicle you get given, if you use it for personal use you'll end up getting BIK'd for it.
..but pickups with a crew cab & 1 tonne or up payload carry a fixed scale charge rather than an emission based malarkyIE a van or pick-up.
Whatever vehicle you get given, if you use it for personal use you'll end up getting BIK'd for it.
2 sMoKiN bArReLs said:
BigAlinEmbra said:
I suspect the restriction the OP is talking about is reclaiming VAT on a vehicle, for which it needs to be a commercial vehicle.
IE a van or pick-up.
Whatever vehicle you get given, if you use it for personal use you'll end up getting BIK'd for it.
..but pickups with a crew cab & 1 tonne or up payload carry a fixed scale charge rather than an emission based malarkyIE a van or pick-up.
Whatever vehicle you get given, if you use it for personal use you'll end up getting BIK'd for it.
BigAlinEmbra said:
2 sMoKiN bArReLs said:
BigAlinEmbra said:
I suspect the restriction the OP is talking about is reclaiming VAT on a vehicle, for which it needs to be a commercial vehicle.
IE a van or pick-up.
Whatever vehicle you get given, if you use it for personal use you'll end up getting BIK'd for it.
..but pickups with a crew cab & 1 tonne or up payload carry a fixed scale charge rather than an emission based malarkyIE a van or pick-up.
Whatever vehicle you get given, if you use it for personal use you'll end up getting BIK'd for it.
Eric Mc said:
I wouldn't have thought that the OP was talking about VAT at all - purely the Income Tax implications on him if he moved back to the UK and was offered a company car by his employer.
Actually a car owned by a company that I own.I assume an accountant would not arrive at a client in a Pick up
jeff m said:
Eric Mc said:
I wouldn't have thought that the OP was talking about VAT at all - purely the Income Tax implications on him if he moved back to the UK and was offered a company car by his employer.
Actually a car owned by a company that I own.I assume an accountant would not arrive at a client in a Pick up
If you buy the car yourself, you only have to pay for the car and you get to charge business mileage to the company.
That is more or less the situation but it is slightly more complicated than that. If the company buys the car, the company will be able to offset the following against its taxable business profits:
i) capital allowances on the vehicle
ii) finance costs of the vehicle (if there are any)
iii) all the running costs of the vehicle (fuel, repairs, insurance etc)
Subject to the cost of the vehicle, there could be some restrictions on the claims made in respect of the above.
If the company LEASES the car, the nature of what can be offset against profits is different. Leasing charges instead of finance charges would be claimed and, subject to the nature of the lease, ordinary accounting style depreciation may be claimable. Again, if the car is classified as an "expensive" car, these costs would be subject to some restrictions.
Obviously, the employee would be subject to addditional Income Tax in the form of a Benefit in Kind charge for the private useage of the car. Benefits in Kind on cars are now very complicated as they are based on the CO2 emmission levels of the particular make and model and some cars therefore attract much lower BIK charges than others. There are some classes of vehicles that are totally BIK free (although they are usually the type of car that no one would ever drive).
The alternative to all the above is to leave the car outside the company and just make a mileage claim for business use of the car.
i) capital allowances on the vehicle
ii) finance costs of the vehicle (if there are any)
iii) all the running costs of the vehicle (fuel, repairs, insurance etc)
Subject to the cost of the vehicle, there could be some restrictions on the claims made in respect of the above.
If the company LEASES the car, the nature of what can be offset against profits is different. Leasing charges instead of finance charges would be claimed and, subject to the nature of the lease, ordinary accounting style depreciation may be claimable. Again, if the car is classified as an "expensive" car, these costs would be subject to some restrictions.
Obviously, the employee would be subject to addditional Income Tax in the form of a Benefit in Kind charge for the private useage of the car. Benefits in Kind on cars are now very complicated as they are based on the CO2 emmission levels of the particular make and model and some cars therefore attract much lower BIK charges than others. There are some classes of vehicles that are totally BIK free (although they are usually the type of car that no one would ever drive).
The alternative to all the above is to leave the car outside the company and just make a mileage claim for business use of the car.
Eric, V8 Cheers.
Not totally dissimilar to here except for emmissions stuff.
I expect we get round the personal use bit by having a sep car for personal.
We don't really have the UK version of the company car (that isn't)
Although we do have mileage allowances for bus use of personal obviously.
Thanks again.
Not totally dissimilar to here except for emmissions stuff.
I expect we get round the personal use bit by having a sep car for personal.
We don't really have the UK version of the company car (that isn't)
Although we do have mileage allowances for bus use of personal obviously.
Thanks again.
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