Advice please on Company Car

[Nors]

Here's a conundrum:-

I do 30k miles a year and I am a one man limited company who put's their PCP through the buisness and also gets the business to pay all the fuel minus private use. I do the majority of miles for business use.

I was told I can only do this with a new car. I reckon I could also go to the dealer and get a nearly new car with low miles at a discount, but don't know if I can still do that?

Your Benefit in Kind tax is based on the value of the car? If I got a bigger car (used) but was the same value as the brand new car would this affect my BIK?

[SS2.]

The BIK value is based on the price of the car when new (plus options), not its secondhand price.

[Nors]

SS2. said:

The BIK value is based on the price of the car when new (plus options), not its secondhand price.

That's cleared that up then - Thanks very much!

Is it still ok to buy a nearly new/used one?

[SS2.]

New or used, you / the company can buy or lease whatever you like (subject to a dealer being willing to lease you an ex-demo / used vehicle).

Someone like Eric would be better placed than me to comment on the most tax efficient method of doing this.

[interstellar]

Would it not be better to pay yourself a car allowance which would be taxed of course but then you can ignore bik and drive what you like.

I do this as I hate diesels and had an M4 until recently and now have a 640i,

I am much happier with this arrangement and it works financially for me.

Edited by interstellar on Thursday 28th February 08:18

[SOL111]

I bought my i3 through my ltd last year. The closest to 'used' that you can buy is an ex demo or pre reg iirc. Anything else counts as properly used and changes the tax treatment.

The capital allowances manual specifies the definition of new/unused:

https://www.gov.uk/hmrc-internal-manuals/capital-a...

Hope this helps.

[Nors]

Thanks for the replies folks, very helpful and much appreciated!

[RicksAlfas]

SOL111 said:

I bought my i3 through my ltd last year. The closest to 'used' that you can buy is an ex demo or pre reg iirc. Anything else counts as properly used and changes the tax treatment.

The capital allowances manual specifies the definition of new/unused:

https://www.gov.uk/hmrc-internal-manuals/capital-a...

Hope this helps.

This only affects the Capital Allowances treatment for the first year on a low emission car, not the BIK which the OP was talking about. Disregarding the Capital Allowances his company can buy a used car and his BIK will be worked out on the original list price (P11D value). If he found a nice demo with £10,000 off the list price it might be worth looking at. I suppose it depends how the company wants to finance the car as well.

[blank]

Nors said:

Here's a conundrum:-

I do 30k miles a year and I am a one man limited company who put's their PCP through the buisness and also gets the business to pay all the fuel minus private use. I do the majority of miles for business use.

I was told I can only do this with a new car. I reckon I could also go to the dealer and get a nearly new car with low miles at a discount, but don't know if I can still do that?

Your Benefit in Kind tax is based on the value of the car? If I got a bigger car (used) but was the same value as the brand new car would this affect my BIK?

Does this really work out cost effective?

I always thought you ended up paying way more in this scenario as you effectively end up paying for it twice with the PCP and BIK. Unless it's really low CC tax.