Car financing

[Burdock]

Hi,

I am currently hiring a car on a fortnightly basis whilst I complete a 3 month contract in March. I plan to form a Limited Company afterwards, before my next contract. I am wondering the best way to finance a car from then onwards? I am thinking in terms of lowest monthly cost combined with greatest tax efficiency. I wonder if anybody has any advice in this area, or can point me somewhere else to look? I plan to meet a few accountants for advice before I set up the company, and was just looking for tips before I do this.

Many thanks!
Martin

[Sockpuppet]

Mileage @ 40p / mile and use that to finance the car. Anything else really does effect BIK.

[Nixon Williams]

Generally my advice would be avoid a company car, claim the mileage allowance instead!

Alan

[Burdock]

Thanks for this. I've been browsing in past messages to this forum, and found that in a poll before Christmas, 84% of respondents said they privately financed their car and claimed mileage.

What if I throw this into the equation: I would like to get a LPG Smart car. Would it still be best to follow the route above, or are there a nest of tax-breaks for enviro-friendly options that might make it better to purchase through company?

Thanks again,
Martin

[XLMonkey]

Nope, still take the 40p mileage rate and pay for it privately.

I think everyone looks at this area when they start up - still haven't heard of anyone that made it cheaper to buy through the company.

[ratewhore]

Thanks for this. I've been browsing in past messages to this forum, and found that in a poll before Christmas, 84% of respondents said they privately financed their car and claimed mileage.

What if I throw this into the equation: I would like to get a LPG Smart car. Would it still be best to follow the route above, or are there a nest of tax-breaks for enviro-friendly options that might make it better to purchase through company?

Thanks again,
Martin

Depends if you want to own a depreciating asset. I lease a hybrid and pay 50% less personal tax than the non-hybrid alternative. I can offset the cost against CT and my accountant advised me it's not that much of a difference if you own your own company in terms of total monthly outlay...