The confusing world of company cars!
Discussion
Good evening,
I have a fairly simple situation but just cannot fathom this convoluted system we seem to have with company cars (I joke, I’m sure it does make sense really).
I am the sole director of a limited company, the company has £35,000 to spend to buy a car. The car will be used by me (director / employee of said company) and will be used 100% for business use.
What is the best (most tax efficient) way of doing this?
I test drove a pick up truck - it was horrible.
Fully electric is not ideal due to restrictions preventing charging.
Hybrid?
Does buying a car second hand make things even more awkward?
Appreciate any suggestions
I have a fairly simple situation but just cannot fathom this convoluted system we seem to have with company cars (I joke, I’m sure it does make sense really).
I am the sole director of a limited company, the company has £35,000 to spend to buy a car. The car will be used by me (director / employee of said company) and will be used 100% for business use.
What is the best (most tax efficient) way of doing this?
I test drove a pick up truck - it was horrible.
Fully electric is not ideal due to restrictions preventing charging.
Hybrid?
Does buying a car second hand make things even more awkward?
Appreciate any suggestions
Tango Orange said:
Good evening,
I have a fairly simple situation but just cannot fathom this convoluted system we seem to have with company cars (I joke, I’m sure it does make sense really).
I am the sole director of a limited company, the company has £35,000 to spend to buy a car. The car will be used by me (director / employee of said company) and will be used 100% for business use.
What is the best (most tax efficient) way of doing this?
I test drove a pick up truck - it was horrible.
Fully electric is not ideal due to restrictions preventing charging.
Hybrid?
Does buying a car second hand make things even more awkward?
Appreciate any suggestions
What truck? Like cars they are not all equal.I have a fairly simple situation but just cannot fathom this convoluted system we seem to have with company cars (I joke, I’m sure it does make sense really).
I am the sole director of a limited company, the company has £35,000 to spend to buy a car. The car will be used by me (director / employee of said company) and will be used 100% for business use.
What is the best (most tax efficient) way of doing this?
I test drove a pick up truck - it was horrible.
Fully electric is not ideal due to restrictions preventing charging.
Hybrid?
Does buying a car second hand make things even more awkward?
Appreciate any suggestions
Tango Orange said:
surveyor said:
What truck? Like cars they are not all equal.
2017 2.3 Nissan Navara - not as refined as I thought it would be. I am tempted to try a 6 cylinder Ranger, or a V6 Amarok but am not convinced.
Nissan’s do not have the best reputation - hard to judge a sector by that example.
Slight tangent here, but company car related.
The end of my company’s financial year is coming up and we’ve got a fair bit of excess profit that I’d like to get rid of rather than just paying 19% corporation tax on it. My wheeze is to buy an electric car via the company and take advantage of the really low BIK on offer for at least the next two years.
Now I initially started looking at new cars but it soon became apparent that the new car my budget would stretch to would be inferior to my current private car which I would be selling. I then thought is there any reason why the car the company buys cannot be a used one? That opens up a world of Teslas etc. I did some Googling and couldn’t find an answer either way, so I thought I’d ask here.
By the way, I know I could lash all the money into a pension, but I really can’t get enthused about that.
The end of my company’s financial year is coming up and we’ve got a fair bit of excess profit that I’d like to get rid of rather than just paying 19% corporation tax on it. My wheeze is to buy an electric car via the company and take advantage of the really low BIK on offer for at least the next two years.
Now I initially started looking at new cars but it soon became apparent that the new car my budget would stretch to would be inferior to my current private car which I would be selling. I then thought is there any reason why the car the company buys cannot be a used one? That opens up a world of Teslas etc. I did some Googling and couldn’t find an answer either way, so I thought I’d ask here.
By the way, I know I could lash all the money into a pension, but I really can’t get enthused about that.
Daveb257 said:
The used car would be treated same an new for P11d/BIK costing regardless of what you pay for it
Yes but not I think for capital allowance purposes? You get 100% on a new fully electric vehicle but not on a second hand one. I’ve no idea what happens next year with super deductions etc....williaa68 said:
Yes but not I think for capital allowance purposes? You get 100% on a new fully electric vehicle but not on a second hand one. I’ve no idea what happens next year with super deductions etc....
I think my cunning plan may have just come unstuck as I didn’t appreciate that the 100% first year allowance was only if the car is used 100% for business and is reduced proportionately for private use. Mine would be probably 90% private use, so I would lose virtually all the benefit.I suppose if I were to buy the car with my own money it would cost me at least 7.5% in dividend tax to get that money out of the business, but I was really hoping for that 19% saving on corporation tax. Bugger.
Mind you - what about this? My financial year ends 31 Mar. If I buy the car and only use it for business until then, is it fair game to claim the 100% allowance and then all bets are off regarding usage in subsequent years?
wattsm666 said:
Go and speak to an accountant. A company can get 100% FYA even if there is private use. A partnership/LLP has different rules, where you do apportion the use.
So I’ve misunderstood and the things I saw were referring to sole traders or partnerships? In that case the plan is back on! I will just run this past my accountant as you suggest, though I suppose worst case if I go ahead with the purchase is that I end up paying a bit more corporation tax?I looked into this fairly recently although at a slightly different price point (£8.5k on a Mini Clubvan) and it seemed that buying a van was definately the most tax efficient way of doing things. For £35k i'd probably be looking at a Discovery Commercial, probably quite a bit more refined than a pick up i imagine.
In the end i just bought a Mini Clubman btw, half the price of the Clubvan to buy like for like, so just made more financial sense to me.
In the end i just bought a Mini Clubman btw, half the price of the Clubvan to buy like for like, so just made more financial sense to me.
Silverage said:
wattsm666 said:
Go and speak to an accountant. A company can get 100% FYA even if there is private use. A partnership/LLP has different rules, where you do apportion the use.
So I’ve misunderstood and the things I saw were referring to sole traders or partnerships? In that case the plan is back on! I will just run this past my accountant as you suggest, though I suppose worst case if I go ahead with the purchase is that I end up paying a bit more corporation tax?Ean218 said:
Silverage said:
My accountant confirms you are correct and I am able to get 100% allowance. Happy days.
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