Second hand EV as company car

[PurpleFox]

Considering an EV purchase through Ltd company, non VAT registered, and wondered about buying second hand instead of used. My understanding is there is nothing stopping a second hand vehicle purchase and the only difference would be the tax relief.

I would be grateful if anyone could help me understand the pro's and con's.......

So new would be 100% allowable in first year

Used vehicle would be in the main rate pool at 18%

Does this mean I can claim 18% of the vehicle cost in tax relief, if so is this 18% of the value each year (until 100% claimed) or just in the first year?

What happens on disposal?

What happens if it is not bought outright but financed?

Thanks in advance

[PurpleFox]

Thanks for both of the replies.

So, trying a worked example on used:

If I bought a second hand car for £50k, I write down 18% in first year, so £9k.
then second year, I write down 18% so another £9k.

By the time I get to year 5 I have claimed £45k against profits instead of the £50k for a new one.

So only £5k difference over 5 years (but spread out rather than in single year)?

I am sure I must be looking at this incorrectly.

[PurpleFox]

Thanks for explaining the write down, most helpful.

I think I have my calcs below correct, assuming a £50k profit every year, £50k car. 25% tax and car sold in year 5 for £25k to keep the maths simple....




So it's not just a wheeze to defer tax, it actually saves tax too BUT, could you save more than that by buying used and avoiding the worst of the depreciation. Depends on all sorts of factors I suppose

[PurpleFox]

Actually just to add, that is an unfair calculation because it should really be done on a £50k new car and a £40k used car as you would either be getting a better car used, or it would cost less......

[PurpleFox]

I am fairly sure an ex demonstrator would count or a pre-registered car for the purposes of a dealer hitting their targets.

I had a look into it but info from hmrc seemed fairly vague....

"New cars are ‘unused and not second hand’. You should accept a car is unused and not second hand even if it has been driven a limited number of miles for the purposes of testing, delivery, test driven by a potential purchaser, or used as a demonstration car."