Tesla Model Y

[rog007]

Ordered White/White Long Range. Hoping for a late Spring delivery (on a slow boat from China) to time with outgoing car.

Home charger (Andersen) fitted next week to take advantage of rebate that ends on 31 March.

Really looking forward to the whole new experience and no more standing in cold garage forecourts pouring various expensive fluids in to a car! Side note - drove BILs iPace; lovely thing and ballistic! But definitely want a Tesla this first time around as iPace looked like an ICE car inside, so not much of an 'EV event' (but still very nice of course).

[PushedDover]

Interesting last para (model Y incoming too)
My AllRoad was in the dealers this week - and I had an ETronn 55 courtesy car. Thoroughly underwhelming. Crap seats. And they even had the paddles on the steering wheel. Don’t understand.
Also really unhelpful high boot.

A car they put a battery in.

I’m hoping for a ‘whole new thing’ under the Tesla route.

[arfur]

Having been in CA during Xmas and NY I saw quite a lot of Model Y on the roads and parked up.

At present it really looks like the best bet if I was to decide to change my X3M 30D and go electric

My X3 is owned personally but as a powerful director I could bung a Model Y though the Ltd, pay the BIK (40% taxpayer - so about 300 a year on a 70k MY), claim 1/2 the VAT and keep it away from personal taxation as a business expense. I would not look to buy the MY, I don't yet think the time is right to consider anything other than leasing as I'm sure things will change dramatically over the next few years, making personal ownership more affordable and maybe ranges higher etc.

Clearly I'd have the challenge of selling the X3 or biting the bullet and chucking it at WBAC

Has anyone got any views on any new offers around ? I've just looked at OctopusEV who quote 505 +vat for 5k miles - I'd need 12k miles really to be on the safe side.

I'm not in any desperate hurry to change - should I wait a while longer ?

ta

Arf

[moonigan]

arfur said:

Having been in CA during Xmas and NY I saw quite a lot of Model Y on the roads and parked up.

At present it really looks like the best bet if I was to decide to change my X3M 30D and go electric

My X3 is owned personally but as a powerful director I could bung a Model Y though the Ltd, pay the BIK (40% taxpayer - so about 300 a year on a 70k MY), claim 1/2 the VAT and keep it away from personal taxation as a business expense. I would not look to buy the MY, I don't yet think the time is right to consider anything other than leasing as I'm sure things will change dramatically over the next few years, making personal ownership more affordable and maybe ranges higher etc.

Clearly I'd have the challenge of selling the X3 or biting the bullet and chucking it at WBAC

Has anyone got any views on any new offers around ? I've just looked at OctopusEV who quote 505 +vat for 5k miles - I'd need 12k miles really to be on the safe side.

I'm not in any desperate hurry to change - should I wait a while longer ?

ta

Arf

You can only claim half the VAT on the lease payments/HP payments. There is no VAT element to claim if you purchase the car but you can claim 100% capital allowance in the first year which is significantly more than the 50% of the VAT on the lease payments.

[Heres Johnny]

moonigan said:

You can only claim half the VAT on the lease payments/HP payments. There is no VAT element to claim if you purchase the car but you can claim 100% capital allowance in the first year which is significantly more than the 50% of the VAT on the lease payments.

Can you please complete the post with what happens when the company sells the car rather than tell half a story.

[moonigan]

Heres Johnny said:

Can you please complete the post with what happens when the company sells the car rather than tell half a story.

I’ll tell you in 3 years.

[Heres Johnny]

moonigan said:

Heres Johnny said:

Can you please complete the post with what happens when the company sells the car rather than tell half a story.

I’ll tell you in 3 years.

If you’re giving advice and quoting 100% FYA then it’s only appropriate that you also point out it reverses when the car goes. Over the life of the car you only offset the depreciation against tax, and with the cars not depreciating a lot at the moment that might not be a particularly big some of money.

A related point is any increase in CGT rates would mean you may pay more back in the future than you saved when you took the 100% FYA

[moonigan]

Heres Johnny said:

If you’re giving advice and quoting 100% FYA then it’s only appropriate that you also point out it reverses when the car goes. Over the life of the car you only offset the depreciation against tax, and with the cars not depreciating a lot at the moment that might not be a particularly big some of money.

A related point is any increase in CGT rates would mean you may pay more back in the future than you saved when you took the 100% FYA

What happens if you dont sell it?

If I lease a model Y (£55K) I claim back £2.6K in VAT over 3 years. If I buy it, I claim a capital allowance of £8.8K. If I then sell it 3 years later for £27.5K the reverse capital allowance would be £4.3K? I accept I could be miles out here but from what I can see buying the car allows you to kick the can down the road if you need to and you are not tied into a lease.

I'm curious how the 130% allowance works. Is that the same. You give back 130% of what the asset is sold for?

[f1racer]

moonigan said:

What happens if you dont sell it?

If I lease a model Y (£55K) I claim back £2.6K in VAT over 3 years. If I buy it, I claim a capital allowance of £8.8K. If I then sell it 3 years later for £27.5K the reverse capital allowance would be £4.3K? I accept I could be miles out here but from what I can see buying the car allows you to kick the can down the road if you need to and you are not tied into a lease.

I'm curious how the 130% allowance works. Is that the same. You give back 130% of what the asset is sold for?

My understanding is;
- If you lease you can claim as a business expense which reduces corp tax and you can also claim half the VAT.
- If you purchase you can claim capital allowance but when you sell the vehichle the money goes back in the company and is liable for corp tax. In your figues above, I think the £27.5k is liable for £5.2k of corp tax.

Interesting point, what if you don't sell. I guess your company have an asset which is depreciating and ultimately reduced down to zero value. Is that what anyone would want to do, whether if is the company's or their own asset?

No idea what the 130% allowance is.

Not sure if I'm missing something but when most people hear that buying an EV is eligible for 100% capital allowance they think it's free money, not realising when they sell they're a tax bill to pay as well. Now, corp tax is going up so the bill could potentially be bigger.

I'm pretty certain to be going down the leasing route which seems expensive but at least nothing to worry about down the line.

[moonigan]

f1racer said:

No idea what the 130% allowance is.

Its a super deduction that applies to certain purchases like commercial vehicles. The SWB Defender hardtop is one such example. It only runs until April 2023.

[Heres Johnny]

moonigan said:

f1racer said:

No idea what the 130% allowance is.

Its a super deduction that applies to certain purchases like commercial vehicles. The SWB Defender hardtop is one such example. It only runs until April 2023.

A Defender, if it qualified, would be classed as a van or commercial vehicle (designed for carrying a load) and they’ve had different tax rules for years including BIK. The 130% allowance is designed to encourage investment in infrastructure, which a salary sacrifice or company car isn’t. An electric charge point however would qualify.

[Monkeypotato]

f1racer said:

My understanding is;
- If you lease you can claim as a business expense which reduces corp tax and you can also claim half the VAT.
- If you purchase you can claim capital allowance but when you sell the vehichle the money goes back in the company and is liable for corp tax. In your figues above, I think the £27.5k is liable for £5.2k of corp tax.

Interesting point, what if you don't sell. I guess your company have an asset which is depreciating and ultimately reduced down to zero value. Is that what anyone would want to do, whether if is the company's or their own asset?

No idea what the 130% allowance is.

Not sure if I'm missing something but when most people hear that buying an EV is eligible for 100% capital allowance they think it's free money, not realising when they sell they're a tax bill to pay as well. Now, corp tax is going up so the bill could potentially be bigger.

I'm pretty certain to be going down the leasing route which seems expensive but at least nothing to worry about down the line.

I’m not an accountant, so I agree that it’s actually a little confusing. From the end user’s point of view, obviously EVs are a no-brainer as the BIK means you effectively pay for the car out of your gross income instead of net.

From the company’s point of view it’s a little less straightforward - which of course only matters if you are/have an interest in the limited company. I thought that buying made more sense, particularly if you’re assuming the Y will hold its value well, and that you could then take the car out of the company at some point down the line. However, as is often the case, it appears you get stung by the tax if you do that. Clearly HMRC are wise to that kind of move. As you say, if you want a known 3 year cost, and an uncomplicated change to a new vehicle after the 3 years, a lease is better (if possibly a little more expensive overall). Unless I’ve misunderstood my accountant, you can’t really get a “free Tesla” (in terms of personal ownership) on the company. There’s also the (admittedly outside) possibility in 3 years time the EV market has moved on considerably, and you don’t want to be a saddled with a Y that has depreciated significantly.

[f1racer]

Monkeypotato said:

I’m not an accountant, so I agree that it’s actually a little confusing. From the end user’s point of view, obviously EVs are a no-brainer as the BIK means you effectively pay for the car out of your gross income instead of net.

From the company’s point of view it’s a little less straightforward - which of course only matters if you are/have an interest in the limited company. I thought that buying made more sense, particularly if you’re assuming the Y will hold its value well, and that you could then take the car out of the company at some point down the line. However, as is often the case, it appears you get stung by the tax if you do that. Clearly HMRC are wise to that kind of move. As you say, if you want a known 3 year cost, and an uncomplicated change to a new vehicle after the 3 years, a lease is better (if possibly a little more expensive overall). Unless I’ve misunderstood my accountant, you can’t really get a “free Tesla” (in terms of personal ownership) on the company. There’s also the (admittedly outside) possibility in 3 years time the EV market has moved on considerably, and you don’t want to be a saddled with a Y that has depreciated significantly.

After x years you can't just take the car out of the company, it's the company's asset. You can of course buy if from the company but at the market value, which then the company is taxed on as it's an income on the books, so makes no sense, especially using post tax money.

Definately agree there is no "free Tesla" or EV, it's how tax effiiciently the EV is paid for, be it purchase or lease. I've across a lot of misleading videos and articles online saying if you purchased an EV you can claim the VAT back as well, which AFAIK this is not true. I don't know the technicalities of why you can't though. Also no mentioning of the corp tax when you sell the vehicle as the money goes back into the company. I think a few years down the line when people sell their company EV many will be shocked to land a bill.

Another misconception is the EV is a straight line depreciating asset, where it depreciates by x% each year, and at some point it will be zero and you just "take" it out of the company. Again, not true, unless you purchase the EV and don't claim the capital allowance, then it follows that type of depreciation is my understanding. However, definately not an asset that depreciates to zero in 3-5 years.

Edited by f1racer on Monday 14th February 10:52

[Heres Johnny]

f1racer said:

Monkeypotato said:

I’m not an accountant, so I agree that it’s actually a little confusing. From the end user’s point of view, obviously EVs are a no-brainer as the BIK means you effectively pay for the car out of your gross income instead of net.

From the company’s point of view it’s a little less straightforward - which of course only matters if you are/have an interest in the limited company. I thought that buying made more sense, particularly if you’re assuming the Y will hold its value well, and that you could then take the car out of the company at some point down the line. However, as is often the case, it appears you get stung by the tax if you do that. Clearly HMRC are wise to that kind of move. As you say, if you want a known 3 year cost, and an uncomplicated change to a new vehicle after the 3 years, a lease is better (if possibly a little more expensive overall). Unless I’ve misunderstood my accountant, you can’t really get a “free Tesla” (in terms of personal ownership) on the company. There’s also the (admittedly outside) possibility in 3 years time the EV market has moved on considerably, and you don’t want to be a saddled with a Y that has depreciated significantly.

After x years you can't just take the car out of the company, it's the company's asset. You can of course buy if from the company but at the market value, which then the company is taxed on as it's an income on the books, so makes no sense, especially using post tax money.

Definately agree there is no "free Tesla" or EV, it's how tax effiiciently the EV is paid for, be it purchase or lease. I've across a lot of misleading videos and articles online saying if you purchased an EV you can claim the VAT back as well, which AFAIK this is not true. I don't know the technicalities of why you can't though. Also no mentioning of the corp tax when you sell the vehicle as the money goes back into the company. I think a few years down the line when people sell their company EV many will be shocked to land a bill.

Another misconception is the EV is a straight line depreciating asset, where it depreciates by x% each year, and at some point it will be zero and you just "take" it out of the company. Again, not true, unless you purchase the EV and don't claim the capital allowance, then it follows that type of depreciation is my understanding. However, definately not an asset that depreciates to zero in 3-5 years.

Edited by f1racer on Monday 14th February 10:52

Yep. And low depreciation undermines the benefit of it being in the company as when it goes, you pay nearly all the tax savings back.

Forget 100% FYA, just see it as the depreciation over the term, insurance and servicing costs are paid for by the company. Low depreciation means its mainly insurance and servicing. No real servicing except tyres leaves you with insurance. As an employee you pay 1%, soon to be 2% BIK irrrespective of the depreciation and running costs, and are limited to 5p per mile for business miles unless you want to risk an audit from HMRC for paying different amounts and trying to prove your actual charging costs which becomes incredibly difficult at home and don't think the Tesla app, Teslafi or a DIY meter is sufficient.

It's been posted elsewhere around here that the bigger company schemes are damn expensive too, they know what they're doing. You can lease a car privately for say £500 a month, as a company lease that magically become £750 a month out your gross salary because that tranlsates to £400 net. How many people bothered to actually check to see what the private lease would be? And for doing the salary sacrifice you might impact your pension, be locked into a car for 3 years, and be limited to 5p a mile.

People assume it's a no brainer, but the big schemes out there are playing on that with their pricing.

Thats not to say it's not a good idea in 95% of situations, just be aware of all the facts and don't just listen to people who are quick to give you half the story. The 100% FYA allowance made a financial adviser in Scotland very wealthy on the back of Tesla, or he expects to be when his 2 Tesla roadsters turn up, but he was a bit light on the full truth. Same thing happened before then with the i8 where people thought they were getting them with 40% off as they were using their company to buy them and using the 100% FYA. Talk about extremely dodgy maths.

[moonigan]

Heres Johnny said:

Yep. And low depreciation undermines the benefit of it being in the company as when it goes, you pay nearly all the tax savings back.

Forget 100% FYA, just see it as the depreciation over the term, insurance and servicing costs are paid for by the company. Low depreciation means its mainly insurance and servicing. No real servicing except tyres leaves you with insurance. As an employee you pay 1%, soon to be 2% BIK irrrespective of the depreciation and running costs, and are limited to 5p per mile for business miles unless you want to risk an audit from HMRC for paying different amounts and trying to prove your actual charging costs which becomes incredibly difficult at home and don't think the Tesla app, Teslafi or a DIY meter is sufficient.

It's been posted elsewhere around here that the bigger company schemes are damn expensive too, they know what they're doing. You can lease a car privately for say £500 a month, as a company lease that magically become £750 a month out your gross salary because that tranlsates to £400 net. How many people bothered to actually check to see what the private lease would be? And for doing the salary sacrifice you might impact your pension, be locked into a car for 3 years, and be limited to 5p a mile.

People assume it's a no brainer, but the big schemes out there are playing on that with their pricing.

Thats not to say it's not a good idea in 95% of situations, just be aware of all the facts and don't just listen to people who are quick to give you half the story. The 100% FYA allowance made a financial adviser in Scotland very wealthy on the back of Tesla, or he expects to be when his 2 Tesla roadsters turn up, but he was a bit light on the full truth. Same thing happened before then with the i8 where people thought they were getting them with 40% off as they were using their company to buy them and using the 100% FYA. Talk about extremely dodgy maths.

Your comments made me revist my figures and raise the question "EV Lease vs EV Purchase as a company owner" with my accountant. I now think its marginal either way.

[Heres Johnny]

moonigan said:

Your comments made me revist my figures and raise the question "EV Lease vs EV Purchase as a company owner" with my accountant. I now think its marginal either way.

Yes, main difference is who’s taking the risk on depreciation. Lease companies are laughing on all cars at the moment as they get all the upside of the unexpected high residuals, if the market takes a bath then you’d be glad you leased. As a company you can PCP (or the business equivalent) and you’ve got an effective stop loss on depreciation but you might pay more on interest and that stop loss might be quite pessimistic. (I call it a stop loss in the sense that if the value drops below that amount, you had back the keys, ifs it’s better, you buy it for the balloon - in theory it’s won win, but as we all know there’s no such thing, they make their money in other ways)

[Monkeypotato]

f1racer said:

After x years you can't just take the car out of the company, it's the company's asset. You can of course buy if from the company but at the market value, which then the company is taxed on as it's an income on the books, so makes no sense, especially using post tax money.

Definately agree there is no "free Tesla" or EV, it's how tax effiiciently the EV is paid for, be it purchase or lease. I've across a lot of misleading videos and articles online saying if you purchased an EV you can claim the VAT back as well, which AFAIK this is not true. I don't know the technicalities of why you can't though. Also no mentioning of the corp tax when you sell the vehicle as the money goes back into the company. I think a few years down the line when people sell their company EV many will be shocked to land a bill.

Another misconception is the EV is a straight line depreciating asset, where it depreciates by x% each year, and at some point it will be zero and you just "take" it out of the company. Again, not true, unless you purchase the EV and don't claim the capital allowance, then it follows that type of depreciation is my understanding. However, definately not an asset that depreciates to zero in 3-5 years.

Edited by f1racer on Monday 14th February 10:52

Yes, I was rather naively under the impression at the end of the 3 years I could buy the car from the company for a nominal amount (or vastly depreciated). Clearly HMRC would be mad to leave that loophole open, and my accountant soon put me right on that!

VAT is always confusing, but I think you’re right that you can’t normally claim any back on a regular car purchase, so the 50% VAT reclaim on a lease has its advantages.

[David87]

Collect my one (it'll be my wife's car, but whatever ) from Southampton on the 19th. Staying in a hotel the night before and getting some dinner, so don't really mind Tesla is making me traipse 1/3 of the way across the country to get it. Car is black paint, black interior, 20" Induction wheels.

Have sorted some alcantara replacements for the horrible wood interior (I'd have had the white seats) and ordered replacement number plates to ditch the stupid metal ones in massive holders. Will add the Acceleration Boost because why not, but other than that just looking forward to using the car.

Will probably swap for a 4680 one whenever they're available, but regardless I think it'll be mega.

[f1racer]

Monkeypotato said:

Yes, I was rather naively under the impression at the end of the 3 years I could buy the car from the company for a nominal amount (or vastly depreciated). Clearly HMRC would be mad to leave that loophole open, and my accountant soon put me right on that!

VAT is always confusing, but I think you’re right that you can’t normally claim any back on a regular car purchase, so the 50% VAT reclaim on a lease has its advantages.

There is a lot of confusion and misconception around the whole EV business purchase.

I haven't made my move yet. One, I can't decided between M3 or MY. Two, I'm pretty sure I'm going to lease but sitting out waiting for a good deal as I'm not desparate to change cars yet.

[EddieSteadyGo]

lizardbrain said:

...

I’m not saying this is a good idea at all… but just out of curiosity who polices valuations?

I bought a car from my business. I checked with my accountant and the process I followed was to just get 3 trade sale valuations from dealers and I paid the highest figure. I did later sell the car privately for more than I had bought it for, but that is before taking into account my time and effort.

I think in theory you could be investigated by HMRC and, if asked, you would need to produce paperwork which looked reasonable. At the end of the day, it's pretty much like so many decisions which impact tax when you run your own business, like vat, business expenses etc i.e. you process it based on what you think are the rules, but be prepared to defend yourself if you get investigated, and be prepared for the consequences if you obviously take the piss.