Second-hand company car tax

Second-hand company car tax

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fly

Original Poster:

69 posts

77 months

Saturday 28th May 2022
quotequote all
I'm in the 46% income tax bracket (in Scotland), a director of a ltd company, and have some questions about company car tax. I've never had a company car before, so not quite sure how it works. If the company buys a SECOND-HAND fully electric (zero emission) company car for me, can anyone give me a breakdown of both what the company needs to pay, and what I need to pay, either as a one-off or monthly?
For example, let's say the P11D is £85,000 and the purchase price of the second-hand car is £75,000.

And then what happens when it comes time to sell the car? Let's say, for example, the company sells it for £40,000 after a couple of years. What does it get back? What does it pay? What do I pay?

Starfighter

4,926 posts

178 months

Saturday 28th May 2022
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Tax is payable against the list price when new and includes any extras fitted. There is no impact on tax to buying used or getting a hefty discount from list.

anonymous-user

54 months

Saturday 28th May 2022
quotequote all
If your company provide you with a vehicle it is taxable.

As above, on the list price including options..

Using the vehicle as a pool car is an option, but you are unlikely to hold up to scrutiny if it isn't a genuine pool car.

You can drive it for work purposes only, in essence buy yourself something else for home. A sportscar for example. Use the Tesla for business only, keep mileage records and hey presto no p11d reportable.

Business purposes can be created using imagination and forward planning.



fly

Original Poster:

69 posts

77 months

Saturday 28th May 2022
quotequote all
Mr Spoon said:
If your company provide you with a vehicle it is taxable.

As above, on the list price including options..

Using the vehicle as a pool car is an option, but you are unlikely to hold up to scrutiny if it isn't a genuine pool car.

You can drive it for work purposes only, in essence buy yourself something else for home. A sportscar for example. Use the Tesla for business only, keep mileage records and hey presto no p11d reportable.

Business purposes can be created using imagination and forward planning.


Just to confirm I've understood right... With a pure electric car, even with private use, there's practically no tax to pay (46% of 2%... And the business NIC is 15% of 2%), right?
Compared with taking money out the business with 46% income tax, and buying the same car privately, it seems like a no-brainer. But I feel like I'm missing something...?

jaydeeuk1

226 posts

60 months

Saturday 28th May 2022
quotequote all
If you do significant business mileage, then buying personally means you can claim 40p a mile. As a company car you can only claim 5p. So for 10000 business miles each year for 3 years its 12000 you can claim vs 150.

You can pay for installation of a charge point , maintenance, servicing and insurance through your Ltd company too, whereas buying personality the 40p a mile is expected to cover it.

I imagine it would be cheaper to declare a dividend than pay from salaried income too, but either way with BIK rates so low its almost always cheaper to buy or lease through Ltd company

As for buying the car, if its brand new you can offset the entire cost against corporation tax, when you sell the car you'd then pay tax. As its 2nd hand it goes against main rate allowanxes

https://www.gov.uk/capital-allowances/business-car...

Edited by jaydeeuk1 on Saturday 28th May 23:43