Use limited company to purchase car and lease-back to me?

[fattiereturns]

So any benefit in kind payments would be pretty tiny to be honest.

I'm trying to avoid spending 10-15k which I really need to spend on house this year as I'd like to sell.

Other options are to lease as normal, 400-500 per month as car is brand new, which I don't care about too much, or to fork out the capital and not be able to use on house.

Here's how I figure it; Company purchase car which it can easily afford. Increase in corp tax would be minimal as there wouldn't be huge amount of profit. My BIK would be minimal as car isn't worth crazy money. So my lease payments and BIK would unlikey be over 180-200 per month. How am I not a winner in this case?

(~1% of value is rough, probably more 1.2% to be honest. BMW not a good example as value drops like a brick once purchased).

Thanks folks

[malvolio]

So any benefit in kind payments would be pretty tiny to be honest.

I'm trying to avoid spending 10-15k which I really need to spend on house this year as I'd like to sell.

Other options are to lease as normal, 400-500 per month as car is brand new, which I don't care about too much, or to fork out the capital and not be able to use on house.

Here's how I figure it; Company purchase car which it can easily afford. Increase in corp tax would be minimal as there wouldn't be huge amount of profit. My BIK would be minimal as car isn't worth crazy money. So my lease payments and BIK would unlikey be over 180-200 per month. How am I not a winner in this case?

(~1% of value is rough, probably more 1.2% to be honest. BMW not a good example as value drops like a brick once purchased).

Thanks folks

ISTR that the BIK is calculated on the car's original value, not it's purchase price, if buying second hand...

Crap idea. Take a divvi and use that.

[Pondlife]

(~1% of value is rough, probably more 1.2% to be honest. BMW not a good example as value drops like a brick once purchased).

Thanks folks

Fiesta Lease Promotions | Ford UK

Ford Fiesta Lease £165 per month (inc VAT)

Ford Fiesta - Overview - Ford UK
Ford Fiesta Buy £10K

Where do you get your 1% figure from. If you are clearly benefiting from this arrangement the taxman will shaft you on it. YourCo will have to charge you VAT on the arrangement if you are VAT registered.

[northernladuk]

Fiesta Lease Promotions | Ford UK

Ford Fiesta Lease £165 per month (inc VAT)

Ford Fiesta - Overview - Ford UK
Ford Fiesta Buy £10K

Where do you get your 1% figure from. If you are clearly benefiting from this arrangement the taxman will shaft you on it. YourCo will have to charge you VAT on the arrangement if you are VAT registered.

I wasn't really going to get in to the details as it's such a non starter but wouldn't the car be an asset of the company rather than a company car if it's to be leased out. A company car has to be available to all employees so can't be leased out to one.

[fattiereturns]

calculated on the car's original value, not it's purchase pric.

That's put the cat in the wheelie bin. Thanks guys, at least I know why I'm not doing it now.

Enjoy your weekend.

[Pondlife]

I wasn't really going to get in to the details as it's such a non starter but wouldn't the car be an asset of the company rather than a company car if it's to be leased out. A company car has to be available to all employees so can't be leased out to one.

I don't think a company car has to be available to all employees. Plus I think there are more options than simply the car is worth x new, has a CO2 rating of y therefore your BIK is z.

I don't know if it's still possible but when I was a permie the company had a system whereby they lent you the money to buy a car off them, new, with the condition you sold it back to them at 9K miles or 1 year at an agreed value. The BIK was therefore the interest on a loan amount for the difference in value at a rate agreed with HMRC. Basically peanuts. I paid about £40 per month on a £30K car. This was because the Co was classed as the importer of the vehicles, however it does show there are more options than the traditional company car route.

My point is that if it looks artificial and that you're taking the proverbial, then it won't fly and that 1% of the 2nd hand value of the car is just that.

[John8589]

A company car has to be available to all employees so can't be leased out to one.

A company car doesn't but a pool car does.

[TheFaQQer]

I don't think a company car has to be available to all employees.

You're right. When I was permie, my company car could be used by any employee who also had a company car; if they used their own car (and took the money) then they couldn't drive any company cars.

[Pondlife]

You're right. When I was permie, my company car could be used by any employee who also had a company car; if they used their own car (and took the money) then they couldn't drive any company cars.

Plus not all employees are at a grade that qualifies for a company car.

[northernladuk]

I don't think a company car has to be available to all employees. Plus I think there are more options than simply the car is worth x new, has a CO2 rating of y therefore your BIK is z.

I don't know if it's still possible but when I was a permie the company had a system whereby they lent you the money to buy a car off them, new, with the condition you sold it back to them at 9K miles or 1 year at an agreed value. The BIK was therefore the interest on a loan amount for the difference in value at a rate agreed with HMRC. Basically peanuts. I paid about £40 per month on a £30K car. This was because the Co was classed as the importer of the vehicles, however it does show there are more options than the traditional company car route.

My point is that if it looks artificial and that you're taking the proverbial, then it won't fly and that 1% of the 2nd hand value of the car is just that.

Ah OK. The numbers are not going to work out anyway as it's well known it's in efficient to purchase cars through the company and the fact that no one else leases it back speaks volumes really. Any trick or twist that flies will be common knowledge and standard process for us..... And this one isn't.