Buying a company car (owned, not leased)
Discussion
A few years ago my company bought a car through the business. I understand it was more tax efficient than leasing.
The director is planning to change his car, and I quite like it. I know it's been well looked after.
Let's say the standard resale value is £30k according to webuyanycar. What are the implications if I were to buy this car for £15k? Would I be expected to pay tax on the difference between market value and what I end up paying? Do different tax rules apply if I (an employee) were to buy it, vesus my partner?
The director is planning to change his car, and I quite like it. I know it's been well looked after.
Let's say the standard resale value is £30k according to webuyanycar. What are the implications if I were to buy this car for £15k? Would I be expected to pay tax on the difference between market value and what I end up paying? Do different tax rules apply if I (an employee) were to buy it, vesus my partner?
Way too complicated a situation to answer based on such rudimentary information.
The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
B9 said:
A few years ago my company bought a car through the business. I understand it was more tax efficient than leasing.
The director is planning to change his car, and I quite like it. I know it's been well looked after.
Let's say the standard resale value is £30k according to webuyanycar. What are the implications if I were to buy this car for £15k? Would I be expected to pay tax on the difference between market value and what I end up paying? Do different tax rules apply if I (an employee) were to buy it, vesus my partner?
If you buy it for less than market value, then, as an employee, you could be subject to a benefit in kind and therefore tax charge as you suggest. The director is planning to change his car, and I quite like it. I know it's been well looked after.
Let's say the standard resale value is £30k according to webuyanycar. What are the implications if I were to buy this car for £15k? Would I be expected to pay tax on the difference between market value and what I end up paying? Do different tax rules apply if I (an employee) were to buy it, vesus my partner?
If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
Eric Mc said:
Way too complicated a situation to answer based on such rudimentary information.
The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
Hi Eric, it's green, around 5 years old, and I'd like to buy it (as a personal purchase) from my company. They'll be disposing of the asset and I'm not so worried about how they deal with their taxes and accounts (just my own!)The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
Trailhead said:
If you buy it for less than market value, then, as an employee, you could be subject to a benefit in kind and therefore tax charge as you suggest.
If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
I did think BIK might be payable as I am an employee. The idea was to replace my partners car as she has the family wagon, but I would expect HMRC would find my partner buying the car from them as smelly (even though I'd like to think we could prove otherwise by association of me continuing to own, insure and use my current car etc)?If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
We're not married but we do reside at the same address
The reality of the situation is that an ex company car has a lower market value than a privately owned car. Paying £15K for a 5 y/o company car is not going to ring any alarm bells with anyone at HMRC, even if it's half market value. So I would just do it and not give it a second thought.
Do you know the value of the car on the company books? If that's close to £15K or less, then you have even less to worry about in terms of anyone questioning it.
Do you know the value of the car on the company books? If that's close to £15K or less, then you have even less to worry about in terms of anyone questioning it.
B9 said:
I did think BIK might be payable as I am an employee. The idea was to replace my partners car as she has the family wagon, but I would expect HMRC would find my partner buying the car from them as smelly (even though I'd like to think we could prove otherwise by association of me continuing to own, insure and use my current car etc)?
We're not married but we do reside at the same address
She is your partner so any less than market value sale to her would result in a Benefit in Kind charge on you. That's the law.We're not married but we do reside at the same address
Are you a director of the company?
B9 said:
Eric Mc said:
Way too complicated a situation to answer based on such rudimentary information.
The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
Hi Eric, it's green, around 5 years old, and I'd like to buy it (as a personal purchase) from my company. They'll be disposing of the asset and I'm not so worried about how they deal with their taxes and accounts (just my own!)The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
Trailhead said:
If you buy it for less than market value, then, as an employee, you could be subject to a benefit in kind and therefore tax charge as you suggest.
If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
I did think BIK might be payable as I am an employee. The idea was to replace my partners car as she has the family wagon, but I would expect HMRC would find my partner buying the car from them as smelly (even though I'd like to think we could prove otherwise by association of me continuing to own, insure and use my current car etc)?If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
We're not married but we do reside at the same address
Trailhead said:
B9 said:
Eric Mc said:
Way too complicated a situation to answer based on such rudimentary information.
The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
Hi Eric, it's green, around 5 years old, and I'd like to buy it (as a personal purchase) from my company. They'll be disposing of the asset and I'm not so worried about how they deal with their taxes and accounts (just my own!)The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
Trailhead said:
If you buy it for less than market value, then, as an employee, you could be subject to a benefit in kind and therefore tax charge as you suggest.
If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
I did think BIK might be payable as I am an employee. The idea was to replace my partners car as she has the family wagon, but I would expect HMRC would find my partner buying the car from them as smelly (even though I'd like to think we could prove otherwise by association of me continuing to own, insure and use my current car etc)?If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
We're not married but we do reside at the same address
Eric Mc said:
Trailhead said:
B9 said:
Eric Mc said:
Way too complicated a situation to answer based on such rudimentary information.
The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
Hi Eric, it's green, around 5 years old, and I'd like to buy it (as a personal purchase) from my company. They'll be disposing of the asset and I'm not so worried about how they deal with their taxes and accounts (just my own!)The taxation of company cars is horrendous whether owned outright or leased.
The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
Trailhead said:
If you buy it for less than market value, then, as an employee, you could be subject to a benefit in kind and therefore tax charge as you suggest.
If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
I did think BIK might be payable as I am an employee. The idea was to replace my partners car as she has the family wagon, but I would expect HMRC would find my partner buying the car from them as smelly (even though I'd like to think we could prove otherwise by association of me continuing to own, insure and use my current car etc)?If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
We're not married but we do reside at the same address
Eric Mc said:
B9 said:
I did think BIK might be payable as I am an employee. The idea was to replace my partners car as she has the family wagon, but I would expect HMRC would find my partner buying the car from them as smelly (even though I'd like to think we could prove otherwise by association of me continuing to own, insure and use my current car etc)?
We're not married but we do reside at the same address
She is your partner so any less than market value sale to her would result in a Benefit in Kind charge on you. That's the law.We're not married but we do reside at the same address
Are you a director of the company?
If I'm still subject to the BIK then I'll just explore buying it myself, appreciate the feedback all
Neddy Sea Goon said:
Would that be the company car with a failed gearbox which you've bought for a knockdown price because you're a bit spanner handy and can fix it in your spare time ?
Somewhere used to work used to pass directors and sales reps cars into the pool car fleet, where the likes of me, used them for business trips. Eventually, they would be sold off to.the highest bidder with faults. I regret not Putting a bid in for a Mondeo 4x4 which wouldn't start. Someone paid £150 for it, towed it to.the local garage, who replaced a couple of sensors and gave him.a bill for £80. He took it to the auctions and sold it for £550 The same day.....Then was.a Passat 20v turbo, which you couldntnopen the boot of. £125 with 3 weeks mot.
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