Company Car

[DimPrawn]

I'm looking for information regarding having a company car vs private use.

I know there is company car tax to pay, and you don't get much back per mile for fuel, but all repairs and servicing can come out of untaxed company income rather my take home pay.

Is this correct?

I ask as my next service (inc cam belt change and some repairs and tyres) are going to cost me about £2000+ and if the company were paying it would be essentially tax free.

Has anyone factored into the company car vs private car debate the fact that car servicing and repairs is bloody expensive these days?

[EqualOpportunities]

I'm looking for information regarding having a company car vs private use.

I know there is company car tax to pay, and you don't get much back per mile for fuel, but all repairs and servicing can come out of untaxed company income rather my take home pay.

Is this correct?

I ask as my next service (inc cam belt change and some repairs and tyres) are going to cost me about £2000+ and if the company were paying it would be essentially tax free.

Has anyone factored into the company car vs private car debate the fact that car servicing and repairs is bloody expensive these days?

Get a cheaper car you flash barsteward.

[Nixon Williams]

Generally there are few occassions where a company car for a contractor is a good choice.

There are various taxes imposed, a tax charge on the user, the company pays employers NIC, there are restrictions on the capital allowances/lease costs, no VAT can be reclaimed on purchase etc.

Claiming a tax free mileage allowance is mostly the better option.

All cases are different but I cannot remember the last time we did the calculation for a client that it was better to have a company car.

Alan

[DimPrawn]

Get a cheaper car you flash barsteward.

I did. I sold the Ferrari and bought a Porsche.

[ratewhore]

I was discussing this with my accountant when I took on a company car. She basically said when you own the business (as opposed to being a permie with a company car) there isn't a lot in it.

For example, the difference between leasing my car privately or through the company equated to about £50 per month when you took into account the extra divvys I would need and tax etc. But of course, as it's through the company, my insurance goes through the books as does any other motoring costs...

HTH

[DimPrawn]

Generally there are few occassions where a company car for a contractor is a good choice.

There are various taxes imposed, a tax charge on the user, the company pays employers NIC, there are restrictions on the capital allowances/lease costs, no VAT can be reclaimed on purchase etc.

Claiming a tax free mileage allowance is mostly the better option.

All cases are different but I cannot remember the last time we did the calculation for a client that it was better to have a company car.

Alan

If I buy a car personally, I cannot reclaim the VAT and nor can the company, so that's neutral.

What is the capital restriction? Can my ltd go out buy a car (new or 2nd hand) outright?

There must be reasons why so many companies offer company cars to employees rather than insist on paying a car allowance?

Is it still biased to private ownership if the car has very high running costs (say a Porsche), where the paphetic 40p per mile doesn't even cover the cost of a set of tyres?

[EqualOpportunities]

I did. I sold the Ferrari and bought a Porsche.

Furry Muff.

[Paddy]

I'm looking for information regarding having a company car vs private use.

I know there is company car tax to pay, and you don't get much back per mile for fuel, but all repairs and servicing can come out of untaxed company income rather my take home pay.

Is this correct?

I ask as my next service (inc cam belt change and some repairs and tyres) are going to cost me about £2000+ and if the company were paying it would be essentially tax free.

Has anyone factored into the company car vs private car debate the fact that car servicing and repairs is bloody expensive these days?

If your earn under £7,500 pa there is no additional personal tax to pay.

And what sort of car do you have to cost so much to change a cam belt?

[Nixon Williams]

If your earn under £7,500 pa there is no additional personal tax to pay.

And what sort of car do you have to cost so much to change a cam belt?

Not sure where you get this idea from!

Perhaps you are thinking that a P11d (statement of benefits) is only completed if the salary exceeds £8500? This also applies to Directors and even if you were not a director AND on a salary less then £8500, the car would be declared on a P9D.

Alan

[Nixon Williams]

If I buy a car personally, I cannot reclaim the VAT and nor can the company, so that's neutral.

What is the capital restriction? Can my ltd go out buy a car (new or 2nd hand) outright?

There must be reasons why so many companies offer company cars to employees rather than insist on paying a car allowance?

Is it still biased to private ownership if the car has very high running costs (say a Porsche), where the paphetic 40p per mile doesn't even cover the cost of a set of tyres?

The Revenue assume any car with a list price in excess of £12000 is a luxury car, so if the company buys it the maximum capital allowances each year are limited to £3000 per annum.

If you do not own the company my advice could be different, company cars may be beneficial if you are not paying the bills and company tax with the car. Also some employees prefer the ease of a company car, even though it is more expensive.

I mentioned that every case is different so it may be beneficial, remember that the benefit is based on the LIST PRICE of the car when new and the CO2 emmissions, so an expensive, fuel hungry cars mean large tax bills!

I hope this helps!

Alan