Buying a company car (owned, not leased)

Buying a company car (owned, not leased)

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B9

Original Poster:

476 posts

96 months

Thursday 25th February 2021
quotequote all
A few years ago my company bought a car through the business. I understand it was more tax efficient than leasing.

The director is planning to change his car, and I quite like it. I know it's been well looked after.

Let's say the standard resale value is £30k according to webuyanycar. What are the implications if I were to buy this car for £15k? Would I be expected to pay tax on the difference between market value and what I end up paying? Do different tax rules apply if I (an employee) were to buy it, vesus my partner?

B9

Original Poster:

476 posts

96 months

Thursday 25th February 2021
quotequote all
Eric Mc said:
Way too complicated a situation to answer based on such rudimentary information.

The taxation of company cars is horrendous whether owned outright or leased.

The only way a vehicle can be "acquired" by a business without massive tax implications is if the vehicle is either classified as a Commercial Vehicle or qualifies as being "green" i.e electric.
Hi Eric, it's green, around 5 years old, and I'd like to buy it (as a personal purchase) from my company. They'll be disposing of the asset and I'm not so worried about how they deal with their taxes and accounts (just my own!)

Trailhead said:
If you buy it for less than market value, then, as an employee, you could be subject to a benefit in kind and therefore tax charge as you suggest.

If your partner buys it then this may still apply since the discount is obtained by way of your employment. That said it’s a harder argument for HMRC to make. Do you share the same surname?
I did think BIK might be payable as I am an employee. The idea was to replace my partners car as she has the family wagon, but I would expect HMRC would find my partner buying the car from them as smelly (even though I'd like to think we could prove otherwise by association of me continuing to own, insure and use my current car etc)?

We're not married but we do reside at the same address

B9

Original Poster:

476 posts

96 months

Friday 26th February 2021
quotequote all
Eric Mc said:
B9 said:
I did think BIK might be payable as I am an employee. The idea was to replace my partners car as she has the family wagon, but I would expect HMRC would find my partner buying the car from them as smelly (even though I'd like to think we could prove otherwise by association of me continuing to own, insure and use my current car etc)?

We're not married but we do reside at the same address
She is your partner so any less than market value sale to her would result in a Benefit in Kind charge on you. That's the law.

Are you a director of the company?
Nope, just a PAYE

If I'm still subject to the BIK then I'll just explore buying it myself, appreciate the feedback all