Capital Allowances on EV, 100% write down

[MrOrange]

Quickie questions on write down for EVs. As I understand it you get 100% first-year writedown on cars under 75g/km.

I run an LLP (Limited Liability Partnership) and as a result I/the partnership pays 40% tax at quite a low threshold (50k or thereabouts). So, if get 100% first year writedown then that's the equivalent of getting 40% back from the tax man.

TRUE/FALSE?

I understand that when I dispose of it I will pay tax on the market value at the time, so I'm only really deferring the tax (sort of)

(40% off a BMW i8 seems to be a good deal)

[onedsla]

This post may be better off in the finance area, where you're more likely to come across the right kind of accountant.

[TooLateForAName]

Pretty much correct.

I've just bought a used leaf at an outstandingly good price from a business. When I asked about the pricing the guy told me that the combination of fleet discount/no congestion charge/free parking in central london/capital allowance it makes it a no-brainer to run a couple of EVs and swap them regularly.

[oop north]

Has to be brand new to qualify - if second hand you are on the regular 18% writing down allowance.

NB I am not totally sure on llp's but if you have less than 100% business use of a vehicle in a sole trade / partnership, you get a proportionate allowance. So buying an i8 with no business use won't do any good

[JonV8V]

When you come to sell it, it's 100% profit as the book value would be zero so yes, at the end of the day you'll only ever write off the depreciation.

100% business use us required to set against VAT

If you use it for any personal use you'll get stung for BIK of 5% this year, 7% next and 9% the year after. On a 100k car that's 2, 3 and 4K out your pocket.

I'm not sure it's that great a deal, certainly not 40% off. Over 2 years, depreciation will be 40k and cost you 24k, BIK will be 7k (you're unlikely to get one before April), so it will have cost you over 30k.

Edited by JonV8V on Monday 21st December 21:59

[MrOrange]

Thanks peeps. Seems I only get to claim the work use portion of the £100k, not the whole lot. And I knew I'd pay the tax on the profit when the vehicle was disposed of. It's an LLP so no BIK as I'm a partner.

Not so clear cut but still attractive if I can write off, say, £50k in the first year. I think I need pro advice.

[ukshooter]

I run as a ltd co and have just had accounts done for 14/15. Bought the car Jan 15 and received the full write down (corporation tax saving of 20%) on purchase price.

[Lozrington]

I run an LLP and bought the Tesla through this and in exactly the way you envisage. It's 90% business use and we intend to keep it for around 6 years/150k miles to maximise the benefit.