Electric Car through the business... worth it?

[Sim75]

I own a business which is pretty much all remote (40 people).
Looking to get a hub / office in east london in the next few months.

I'm looking to buy a small electric car as a runaround, so wondering whether it's better to do it through the business or not.
Anyone had any experience of this?

PS: My tax advsior is skiing for two weeks!

[Imasurv]

Last couple of years it’s been advantageous to have an electric car as a company car as bik rates have been 0,1 and 2%, which means basically very little by way of tax. Combine that with other benefits such as cheaper fuel etc, half vat/full vat reclaim dependent on whether the car is used privately as well as for business, and it can be offset against corp tax and it has been a pretty good way to run a car. I’ve had a Tesla model 3 on the advice of my accountant, who is running a taycan.

[Silverage]

It was a no-brainer in my case.

Car bought outright so 100% of the cost came off our corporation tax bill. No road tax, “fuel” at just over 1p per mile and token BIK at £7 per month.

The party is coming to end a bit though. BIK is doubling and electricity costs are about to go through the roof.

[pmanson]

Running a Taycan through the business.

Business pays the lease (reducing corp tax), works out at circa £40 p/mth in BIK (which will double next year)

[Luke.]

Silverage said:

It was a no-brainer in my case.

Car bought outright so 100% of the cost came off our corporation tax bill. No road tax, “fuel” at just over 1p per mile and token BIK at £7 per month.

The party is coming to end a bit though. BIK is doubling and electricity costs are about to go through the roof.

So BIK is going to just £14 a month and electricity is still going to be far cheaper than petrol.

[anonymous-user]

Silverage said:

Car bought outright so 100% of the cost came off our corporation tax bill.

It didn't.

It reduced your profit on which corporation tax is calculated.

[Silverage]

Rufus Stone said:

Silverage said:

Car bought outright so 100% of the cost came off our corporation tax bill.

It didn't.

It reduced your profit on which corporation tax is calculated.

You're quite correct of course - I should have worded that better.

To put some numbers on it, the car was £30,000 which the company bought outright and that money would have attracted £5700 corporation tax otherwise. I know that when the car is eventually sold that the proceeds will again be liable for corp tax.

[Silverage]

Luke. said:

So BIK is going to just £14 a month and electricity is still going to be far cheaper than petrol.

I know the BIK is still a bargain, but if my electricity gets to 30p per kwh and my car is doing 3 miles per kwh, that's obviously 10p per mile which is a six-fold increase in what it's costing now and getting back towards ICE costs.

[Puzzles]

If you want an ev then it makes sense. If you do purchase rather than lease then you could get a tax charge when you sell it in a few years time.