Own business - DIY Salary Sacrifice Scheme?
Discussion
Apologies if this has been covered before, but I can't find any reference to it via google. I found the following regarding SS in general on HMRC, but nothing specific on EVs https://www.gov.uk/guidance/salary-sacrifice-and-t...
I am joint owner of limited company (less than 10 employees) and we're doing ok as a business. I'm in the 40% tax band, but with a fair wind could be into the 45% tax band by the end of the year. Given the company structure, and my desire to get a new house in the next 18m we have not gone down the dividend route for renumeration.
A lot of the SS schemes are (understandably) targeting larger firms with more people and therefore more sales, so not interested in speaking to me
Could I buy an EV through my company, purchase the insurance etc via the company, and then lease the car to myself under the Salary Sacrifice scheme?
Our current accountants are good, but only provide basic services. Before sounding them out, I thought I'd see if anyone on here has done similar?
I am joint owner of limited company (less than 10 employees) and we're doing ok as a business. I'm in the 40% tax band, but with a fair wind could be into the 45% tax band by the end of the year. Given the company structure, and my desire to get a new house in the next 18m we have not gone down the dividend route for renumeration.
A lot of the SS schemes are (understandably) targeting larger firms with more people and therefore more sales, so not interested in speaking to me
Could I buy an EV through my company, purchase the insurance etc via the company, and then lease the car to myself under the Salary Sacrifice scheme?
Our current accountants are good, but only provide basic services. Before sounding them out, I thought I'd see if anyone on here has done similar?
pghstochaj said:
We are not massive and use leasingoptions roughly in that way. It seems to be a lot cheaper than the quotations provided on here through the larger schemes.
Thanks, took a quick look and they don't seem to advertise SS4Q said:
I just take mine as a fully expensed company car with virtually no BIK.
Good point, thank you. Unfortunately my business partner doesn't drive, so i'm exploring options where I pay the cost (and save via tax).porterpainter said:
Good point, thank you. Unfortunately my business partner doesn't drive, so i'm exploring options where I pay the cost (and save via tax).
Just make a salary adjustment to compensate, you don't need a complex scheme.My insurance is in my name even though the car is owned by the company.
Many people use their company to buy the cars, just be mindful of a few things people forget to mention
100% first year allowance unwinds when you sell. Over the life of the car you only offset the depreciation against company profits and therefore corporation tax
You’ll be limited to 4p (I think it’s going up but not by much) if you claim business mileage
VAT can not be claimed if there is any personal use unless the company leases when they can claim 50% back
With low depreciation at the moment the savings aren’t always as good as they seem. I decided to buy personally, it’s worth more than I paid 6 months later and I can take 45p a mile out the company tax free. If I’d put it through tbt company, the increase in value would be subject to corp tax and I’d only be tacking 4p a mile. Current times are exceptional so that’s unusual but people assume without doing some man maths that through the company is always a winner.
100% first year allowance unwinds when you sell. Over the life of the car you only offset the depreciation against company profits and therefore corporation tax
You’ll be limited to 4p (I think it’s going up but not by much) if you claim business mileage
VAT can not be claimed if there is any personal use unless the company leases when they can claim 50% back
With low depreciation at the moment the savings aren’t always as good as they seem. I decided to buy personally, it’s worth more than I paid 6 months later and I can take 45p a mile out the company tax free. If I’d put it through tbt company, the increase in value would be subject to corp tax and I’d only be tacking 4p a mile. Current times are exceptional so that’s unusual but people assume without doing some man maths that through the company is always a winner.
porterpainter said:
pghstochaj said:
We are not massive and use leasingoptions roughly in that way. It seems to be a lot cheaper than the quotations provided on here through the larger schemes.
Thanks, took a quick look and they don't seem to advertise SS4Q said:
I just take mine as a fully expensed company car with virtually no BIK.
Good point, thank you. Unfortunately my business partner doesn't drive, so i'm exploring options where I pay the cost (and save via tax).porterpainter said:
Good point, thank you. Unfortunately my business partner doesn't drive, so i'm exploring options where I pay the cost (and save via tax).
The business pays the rental and you take an equivalent pay cut.3 of my employees do the same and as it’s off gross salary they save up to 40% of the cost
4Q said:
Yes it’s fully electric. I rent it all incl from On.to which includes insurance and charging etc. I can claim all the vat back and offset the full monthly against tax as it’s a rental.
How do you claim the vat back if it’s also used for personal use? I thought you could only do 50%?I have done this through my own business. You don’t actually need to take a lower salary - it is just a notional salary sacrifice. So my salary is circa £9500 and has been for some years. The car lease
A friend has a Co-shareholder in his business and they both have salaries around £50k pa. He has an EV as company car and the cost to the company (including employer nic on the benefit in kind and the cost of insurance) is calculated by his accountant and that figure is deducted from his pre-tax salary. So his salary is now around £44,000 but his business partner still has salary of £50k
You don’t need a specialist lease Company to do this for you - you do need an accountant who can do the maths to help you keep it fair
A friend has a Co-shareholder in his business and they both have salaries around £50k pa. He has an EV as company car and the cost to the company (including employer nic on the benefit in kind and the cost of insurance) is calculated by his accountant and that figure is deducted from his pre-tax salary. So his salary is now around £44,000 but his business partner still has salary of £50k
You don’t need a specialist lease Company to do this for you - you do need an accountant who can do the maths to help you keep it fair
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