Ltd Company wants to lease car but Accountant says No!

[MrBen]

I've been fortunate that my Ltd company has been doing well and has saved up enough for a company car (electric of course for no BIKs) . Then I was IR35'd. Had a catch up chat with our Accountant and casually mentioned that the company has sufficient funds for a car on a lease but Accountant said no as HMRC might get the hump as there are no new sales coming into the Ltd. I'd not heard this before or even considered it. Is the Accountant right?

[TheDogsNads]

I've been fortunate that my Ltd company has been doing well and has saved up enough for a company car (electric of course for no BIKs) . Then I was IR35'd. Had a catch up chat with our Accountant and casually mentioned that the company has sufficient funds for a car on a lease but Accountant said no as HMRC might get the hump as there are no new sales coming into the Ltd. I'd not heard this before or even considered it. Is the Accountant right?

Your accountant is talking tosh. Do they hold out that a director is not supposed to take divis because there's no income coming in?!

Thing to bear in mind is, taking out a lease for 3 or 4 years but winding your company up in say the next 12 months if you can only get IR35 caught contracts. Better to take a lease as a private individual, even leccie.

[WTFH]

... Better to take a lease as a private individual, even leccie.

This.
If you buy it through the Ltd and you want to close the Ltd down, you either have to buy the car out of the business lease, or return it (and potentially pay any penalties).
There's a few threads on here about this kind of scenario.

[northernladuk]

has sufficient funds for a car on a lease

I'd be more worried about this. What does this mean? You only need a couple of K to get a car on lease. If that's all the funds your LTD has then he's absolutely right to warn you off getting it.

[barely_pointless]

I'd be more worried about this. What does this mean? You only need a couple of K to get a car on lease. If that's all the funds your LTD has then he's absolutely right to warn you off getting it.

+1

[Lance]

I’ve come up with a new idea (not really new but new to me).
Since lockdown my car has done f*** all.
In fact I might as well have SORNed it or sold it.

So new plan in formation is to get rid. And simply hire when needed. That’s a fully claimable business expense (no BIK). Any personal travel will be done using the family’s one remaining car, or taxi.

I reckon I’ll need maybe 6-8 weeks max in a year. That’s gonna cost less than leasing a car and without the financial commitment.

[Craig@Clarity]

I've been fortunate that my Ltd company has been doing well and has saved up enough for a company car (electric of course for no BIKs) . Then I was IR35'd. Had a catch up chat with our Accountant and casually mentioned that the company has sufficient funds for a car on a lease but Accountant said no as HMRC might get the hump as there are no new sales coming into the Ltd. I'd not heard this before or even considered it. Is the Accountant right?

I'm not sure about HMRC getting "the hump" because of no new sales. If the company has been non-trading for a while, then they maybe suggesting you come up with a reasonable business decision as to why the company would want to buy a car in case of any HMRC inquiry into the purchase. The answer is usually you can pretty much do anything in the company. The caveat is what are the tax implications of doing whatever you're doing and then for you to weigh up your options. If you want to get an electric company car, you can. Your accountant should/would then outline the tax implications.