Company car insurance & young drivers
Discussion
I've just been reading another thread that mentioned the "fronting" insurance fraud.
And this thought popped into my mind.
If Dad sets up a limited company (one off charge of £80, annual charges of £0 if you're good with numbers, or maybe £150 for an accountant once a year).
Then employed the son/daughter to work for that company.
And provided them with a company car.
So the son/daughter would obviously be covered by the company car insurance.
Pay them the equivalent amount to what the benefits in kind to be paid on the car are.
A company doesn't *have* to do anything, so long as it's records and returns are done correctly and upto date.
And so long as the CC tax is correctly worked out on the private miles done "outside" business hours is done correctly, that should be fine too?
So, would doing that work out cheaper than the son/daughter having to sell their internal organs to pay for their own private insurance? With a family of one child? And the more kids in the family that are driving, the cheaper it'd get. Is there an age limit normally set by CC insurers?
I suppose mum and dad can sell their cars to the company too, and also be in the CC insurance scheme.
So, is this viable? Or is company car insurance just as expensive?
And this thought popped into my mind.
If Dad sets up a limited company (one off charge of £80, annual charges of £0 if you're good with numbers, or maybe £150 for an accountant once a year).
Then employed the son/daughter to work for that company.
And provided them with a company car.
So the son/daughter would obviously be covered by the company car insurance.
Pay them the equivalent amount to what the benefits in kind to be paid on the car are.
A company doesn't *have* to do anything, so long as it's records and returns are done correctly and upto date.
And so long as the CC tax is correctly worked out on the private miles done "outside" business hours is done correctly, that should be fine too?
So, would doing that work out cheaper than the son/daughter having to sell their internal organs to pay for their own private insurance? With a family of one child? And the more kids in the family that are driving, the cheaper it'd get. Is there an age limit normally set by CC insurers?
I suppose mum and dad can sell their cars to the company too, and also be in the CC insurance scheme.
So, is this viable? Or is company car insurance just as expensive?
The cost to a company of owning a car are pretty steep if you look into it. I guess this could be done, however the insurers would want to know what sort of 'business' use the cars were being used for, and well there is no business.
Overall this would end up probably costing the same if not more than the normal route.
Overall this would end up probably costing the same if not more than the normal route.
marshalla said:
How is the company generating income to cover its debts, or what assets are available to cover its debts ?
If the answers are "it has no income" and "none" respectively, then it is an insolvent company and trading illegally.
The company would have no debts, effectively dormant. It cannot be insolvent if it isn't trading in the first place..If the answers are "it has no income" and "none" respectively, then it is an insolvent company and trading illegally.
marshalla said:
Greengecko said:
The company would have no debts, effectively dormant. It cannot be insolvent if it isn't trading in the first place..
It has to cover employee salary and company car insurance, according to the OP's "cunning plan".Gardening services. (husband does the gardening for his family and gets "paid"), Property Maintenance, Financial Advice, etc, etc.
Any intangible thing would do. Anything already being done that can be done by an outside company would do.
I've never heard of anyone doing it, and I bet someone else has thought of it before now, so I'm wondering where the problem is.
My guess is that the cost of the CC insurance is prohibitive when compared to even a new drivers private insurance, but I'm curious, hence asking.
(if you're wondering, I'm single and no kids, this is purely a hypothetical scenario)
Greengecko said:
The cost to a company of owning a car are pretty steep if you look into it. I guess this could be done, however the insurers would want to know what sort of 'business' use the cars were being used for, and well there is no business.
Overall this would end up probably costing the same if not more than the normal route.
I'm just about to get a new car on a personal 3 year PCP.Overall this would end up probably costing the same if not more than the normal route.
I notice that the business deals are about 2/3rds the price of private deals (IIRC they're not called PCP as the P is personal or private, but still 3 year deal), which is a lot more than 20% VAT.
I know that having a company car is expensive, when it's used purely for company business, and if it's used for private use as well, the cost goes up a lot IIRC.
But seeing some of these ludicrous quotes for new drivers has me wondering if doing it this way would work our cheaper for the first year (or two, or three).
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