Buying an EV via a Ltd company
Discussion
MaxFromage said:
The rules on accessories or modifications are here:
https://www.gov.uk/hmrc-internal-manuals/vat-input...
You would have to argue the purchase for business use and this could also be affected by the business/private mileage ratio.
HMRC's rules haven't really caught up with the way Tesla work, and it'd be interesting to know what HMRC would say about the BIK list price... Clearly not an issue at 0%, but as it increase it could be.
I think that is quite significant. Input VAT is not reclaimable at time of initial purchase but may, if justifiable for business purposes, be claimed subsequently. Make’s a strong case to not pay/order the full autonomous mode on a Tesla at order time but add it on later, saving a grand or so,https://www.gov.uk/hmrc-internal-manuals/vat-input...
You would have to argue the purchase for business use and this could also be affected by the business/private mileage ratio.
HMRC's rules haven't really caught up with the way Tesla work, and it'd be interesting to know what HMRC would say about the BIK list price... Clearly not an issue at 0%, but as it increase it could be.
MrOrange said:
I think that is quite significant. Input VAT is not reclaimable at time of initial purchase but may, if justifiable for business purposes, be claimed subsequently. Make’s a strong case to not pay/order the full autonomous mode on a Tesla at order time but add it on later, saving a grand or so,
And you can pay it with a credit card and collect the miles.I've signed up to a business lease for a Model 3 performance, should be here October hopefully (!).
One thing I haven't got my head round - it will be a company car, and usually company cars would/could have their fuel paid for by the Company - how does this work with an EV?
Is there a set figure I can claim to "fuel " it, as I assume my electric bill is going to shoot up but I cant identify the exact figure the car is costing to run?
One thing I haven't got my head round - it will be a company car, and usually company cars would/could have their fuel paid for by the Company - how does this work with an EV?
Is there a set figure I can claim to "fuel " it, as I assume my electric bill is going to shoot up but I cant identify the exact figure the car is costing to run?
I'm buying cash rather than lease. But my ltd company profits are quite lumpy, so it will be relatively easy to time disposal to avoid taxable proceeds, or max out the SIPP that year etc.
Plus I'm optimistic on residuals on the model 3. Especially if GPB keeps trending to parity with USD
Plus I'm optimistic on residuals on the model 3. Especially if GPB keeps trending to parity with USD
MOBB said:
I've signed up to a business lease for a Model 3 performance, should be here October hopefully (!).
One thing I haven't got my head round - it will be a company car, and usually company cars would/could have their fuel paid for by the Company - how does this work with an EV?
Is there a set figure I can claim to "fuel " it, as I assume my electric bill is going to shoot up but I cant identify the exact figure the car is costing to run?
4p per business mile. You’d need to find a way to measure what the car is using - I had a meter fitted in my garage without realising the govt grant for a charger required charging info to be recorded anyway. But it’s my company so not exactly a problem to get my employer’s consent One thing I haven't got my head round - it will be a company car, and usually company cars would/could have their fuel paid for by the Company - how does this work with an EV?
Is there a set figure I can claim to "fuel " it, as I assume my electric bill is going to shoot up but I cant identify the exact figure the car is costing to run?
MaxFromage said:
Essentially it's the net lease cost plus 10% VAT per month multiplied by 81% to adjust for corporation tax then multiplied by 67.5% to account for higher rate tax on dividends. This gives you your net cost of the lease i.e. what you would lose if you took as dividends. Bear in mind you need to calculate the real cost of the lease by adding in the upfront payments as well.
Add
Insurance cost x 81% x 67.5%
Add
Servicing/consumable cost before VAT x 81% x 67.5%
Add
Fuel- I just take 10,000 miles divided by 4 miles per kWh x 13p per kwh (net business cost without VAT) x 81% x 67.5%. This is because I'll charge the car at the office. Estimated, but the cost of charging is relatively minimal.
This then gives you your 'net' cost, what you would lose from your pocket.
You can adjust these figures for basic rate taxpayers or employees accordingly. Also bear in mind corporation tax should be 18% from April 2020, or 82% as a multiplier.
If you're not registered for VAT, you cannot claim any of the VAT back and so your lease costs will be nearly 10% higher than a VAT registered business. HMRC only allows you to reclaim 50% of the VAT back on company cars, not 100%.
You could charge the business 4p for every business mile that you travel using your personal electricity. Private miles are your cost. But frankly 'fuel' costs are only a small proportion of the total lease cost.
Quite a few other considerations, but that gives you an idea.
Just crunching my own numbers on this. Should I also be adding BIK? Looks like that comes in around £27 per month if I've done the numbers right. Based on 2% from April 2020. Add
Insurance cost x 81% x 67.5%
Add
Servicing/consumable cost before VAT x 81% x 67.5%
Add
Fuel- I just take 10,000 miles divided by 4 miles per kWh x 13p per kwh (net business cost without VAT) x 81% x 67.5%. This is because I'll charge the car at the office. Estimated, but the cost of charging is relatively minimal.
This then gives you your 'net' cost, what you would lose from your pocket.
You can adjust these figures for basic rate taxpayers or employees accordingly. Also bear in mind corporation tax should be 18% from April 2020, or 82% as a multiplier.
If you're not registered for VAT, you cannot claim any of the VAT back and so your lease costs will be nearly 10% higher than a VAT registered business. HMRC only allows you to reclaim 50% of the VAT back on company cars, not 100%.
You could charge the business 4p for every business mile that you travel using your personal electricity. Private miles are your cost. But frankly 'fuel' costs are only a small proportion of the total lease cost.
Quite a few other considerations, but that gives you an idea.
Sambucket said:
I'm buying cash rather than lease. But my ltd company profits are quite lumpy, so it will be relatively easy to time disposal to avoid taxable proceeds, or max out the SIPP that year etc.
Plus I'm optimistic on residuals on the model 3. Especially if GPB keeps trending to parity with USD
Has anyone done a comparison on buying cash v lease ? I know ev cars seem to be showing decent residual value but would be good to see an actual comparison between leasing savings and buying cash savings Plus I'm optimistic on residuals on the model 3. Especially if GPB keeps trending to parity with USD
ODRALLAG said:
Has anyone done a comparison on buying cash v lease ? I know ev cars seem to be showing decent residual value but would be good to see an actual comparison between leasing savings and buying cash savings
Noone knows, its not like a 3 series where you have 4 generations fo car to judge depreciation prices on.This is a new product and no car like the M3 has existed yet so it's anyone's guess.
Sambucket said:
I think he means has anyone done the sums for cash vs lease, for average depreciation?
What's average deprciation? Average of the cars in its class or average depreciation accross all cars.To me it seemed a pretty pointless calculation as it good go either way. Look at what happened to the leaf.
jamoor said:
What's average deprciation? Average of the cars in its class or average depreciation accross all cars.
To me it seemed a pretty pointless calculation as it good go either way. Look at what happened to the leaf.
Pretty pointless, but not entirely pointless. To me it seemed a pretty pointless calculation as it good go either way. Look at what happened to the leaf.
I'd be interested in a comparison for a random set of arbitrary variables, regardless of the depreciation metric, if anyone has it.
So could take the GFV? Or 18% a year.
Doesn't matter really, If I disagree with the depreciation figure, i'll mentally adjust for it, but would still be interested in the relative difference seeing as there are different treatments. Eg half vat in one case.... etc.
ODRALLAG said:
Has anyone done a comparison on buying cash v lease ? I know ev cars seem to be showing decent residual value but would be good to see an actual comparison between leasing savings and buying cash savings
It’s a bit tricky to work out as so many variables interest rates / cost of money / GFV / deposit / upfront payment / company type / VAT status / tax liabilities & rates / expected mileage / term length / market rate at deposal / yada yada yada.I’d work the numbers out yourself using reasonable propositions.
Search function is a great thing.
So having test driven the following:
iX - built like a tank and lovely thing to be in. Ride and noise levels were amazing. Looks put my wife right off and would need 50 for good range £££.
EV6 - messy cabin layout with buttons everywhere. Nice ride but put off by the small boot for the size of the thing.
Model Y LR - Ride on a Shanghai 2022 one was as good as EV6, quieter inside and huge storage. Media screen integration and speed of use blew the rest away.
Anyways - LTD company purchase. I won’t buy outright so options are BCH or business PCP. I’m a little confused as to the benefit of depreciating the asset on the PCP. The residuals are incredibly strong right now on M3 trade ins after 3 years. 80 % retained value which probably cannot keep that way.
Anyone done a business purchase recently and been through the numbers please?
So having test driven the following:
iX - built like a tank and lovely thing to be in. Ride and noise levels were amazing. Looks put my wife right off and would need 50 for good range £££.
EV6 - messy cabin layout with buttons everywhere. Nice ride but put off by the small boot for the size of the thing.
Model Y LR - Ride on a Shanghai 2022 one was as good as EV6, quieter inside and huge storage. Media screen integration and speed of use blew the rest away.
Anyways - LTD company purchase. I won’t buy outright so options are BCH or business PCP. I’m a little confused as to the benefit of depreciating the asset on the PCP. The residuals are incredibly strong right now on M3 trade ins after 3 years. 80 % retained value which probably cannot keep that way.
Anyone done a business purchase recently and been through the numbers please?
Edited by Familymad on Sunday 16th October 06:48
Familymad said:
Search function is a great thing.
So having test driven the following:
iX - built like a tank and lovely thing to be in. Ride and noise levels were amazing. Looks put my wife right off and would need 50 for good range £££.
EV6 - messy cabin layout with buttons everywhere. Nice ride but put off by the small boot for the size of the thing.
Model Y LR - Ride on a Shanghai 2022 one was as good as EV6, quieter inside and huge storage. Media screen integration and speed of use blew the rest away.
Anyways - LTD company purchase. I won’t buy outright so options are BCH or business PCP. I’m a little confused as to the benefit of depreciating the asset on the PCP. The residuals are incredibly strong right now on M3 trade ins after 3 years. 80 % retained value which probably cannot keep that way.
Anyone done a business purchase recently and been through the numbers please?
Are you planning to pay off the future value and for the company to own the car outright? If not this will cause more issues than not. Better to lease if that's the case.So having test driven the following:
iX - built like a tank and lovely thing to be in. Ride and noise levels were amazing. Looks put my wife right off and would need 50 for good range £££.
EV6 - messy cabin layout with buttons everywhere. Nice ride but put off by the small boot for the size of the thing.
Model Y LR - Ride on a Shanghai 2022 one was as good as EV6, quieter inside and huge storage. Media screen integration and speed of use blew the rest away.
Anyways - LTD company purchase. I won’t buy outright so options are BCH or business PCP. I’m a little confused as to the benefit of depreciating the asset on the PCP. The residuals are incredibly strong right now on M3 trade ins after 3 years. 80 % retained value which probably cannot keep that way.
Anyone done a business purchase recently and been through the numbers please?
Edited by Familymad on Sunday 16th October 06:48
Familymad said:
Not sure. I think that would prevent me from 100% first year allowance as the lease co is the owner?
I bought an EV through my business and took out PCP but with the intention of paying the final payment. So the 1st year write down was fine. I don't intend to buy back or replace it so the company will own it long term.This is fine but is a pain (according to my accountant) if you take out PCP but then hand the car back, because of the 1st year write down. In this scenario they advised to lease.
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