Can I have a free car?

[HRG]

I just speed read something about a new tax thing where you can claim 100% relief on a new car with emissions below 110g (not that I'd actually want one of those) in the first year.

What does this actually mean it will cost if I use it myself? Situation currently is a ltd company, I'm the director and sole employee and I would actually use the car for more personal than business miles. At the moment I pay myself 40 pence a mile.

Would there be a big personal BIK hit on a new car under that scheme?

[jamesuk28]

Isn't that just it though, there is no BIK liabilty for year 1?

[Brown and Boris]

I did this in 2004 with an Audi A2 TDi. I thought it ended in 2008 but they must have extended it.


Not a feee company car!


The company get 100% capital allowance year 1 inateds of speading it out over (is it 4 years?). However, you carry that liability when you sell the car so it helps a bit with cashflow Y1 but not much. You still pay the BiK company car tax and the company still pay employers NI on the benefit. We kept the car three years so really all we did was have the allowance upfront.


It is rarely used, so much so that when I claimed the 100% allowance Y1 it triggered an aspect enquiry into the company accounts by HMRC and my accountant had to explain it to HMRC.