Is business car insurance taxable as BIK?

[cannon999]

If you have a business lease and you close your company, the car goes back and your company will probably have to pay some kind of penalty for stopping the lease early.
You end up with no car.

If you want to transfer the car to personal ownership, you'll need to stop your business lease and then start a personal lease - it might not be at the same rate + VAT, etc.

There's several threads on here about it.

It is a 2 year lease. What reason would I have for closing down the company?

[WTFH]

It is a 2 year lease. What reason would I have for closing down the company?

Corp tax going up
IR35
Market downturn
Change in personal circumstances
...etc

[cannon999]

Have to resurrect this thread.

I have opted for going for personal cover rather than business cover (as business is more expensive).

Can the company reimburse me for car insurance in this case? (Car is registered to the business and I am the director) If it can - is there BIK attached? Any links to info would be useful - I have tried googling

[malvolio]

Have to resurrect this thread.

I have opted for going for personal cover rather than business cover (as business is more expensive).

Can the company reimburse me for car insurance in this case? (Car is registered to the business and I am the director) If it can - is there BIK attached? Any links to info would be useful - I have tried googling

You really don't understand what a BIK is, do you...

Put it this way - would you expect Tesco to reimburse you for the costs of driving to their store to do your shopping?

And I assume your insurance covers business usage - not just commuting - which is reflected in the premium...

But yes, YourCo can reimburse you and yes, it would attract personal tax at your highest marginal rate as though it were earned income, because that is what it is.

[northernladuk]

It is a 2 year lease. What reason would I have for closing down the company?

We've had enough threads in here with people getting caught short.

Rather odd question with the market in utter turmoil and the IR35 changes coming up.

[WTFH]

Have to resurrect this thread.

I have opted for going for personal cover rather than business cover (as business is more expensive).

Can the company reimburse me for car insurance in this case? (Car is registered to the business and I am the director) If it can - is there BIK attached? Any links to info would be useful - I have tried googling

Let's get this right, you got the car through your company, but you're not going to use it for company activities.

No, you can't claim PERSONAL insurance through your business, it's not a BIK, it's a personal cost. You have to pay 100% of it.
You might find your company lease on the car will specify the type of insurance you need to have. You might also find buying/leasing something for the company but using it exclusively for non-company activities might be considered fraud.

[cannon999]

Let's get this right, you got the car through your company, but you're not going to use it for company activities.

No, you can't claim PERSONAL insurance through your business, it's not a BIK, it's a personal cost. You have to pay 100% of it.
You might find your company lease on the car will specify the type of insurance you need to have. You might also find buying/leasing something for the company but using it exclusively for non-company activities might be considered fraud.

The lease agreement asks for a fully comprehensive insurance which is what this is. It's not used exclusively for non-company activities? It's used for both personal and company activities. That's allowed.

It is a vehicle registered to the business. To use this vehicle for going to meetings this vehicle MUST be insured. How can you say that it's not expensable? That's nonsense. Expenses if you're self-employed: Car, van and travel expenses - GOV.UK

[cannon999]

We've had enough threads in here with people getting caught short.

Rather odd question with the market in utter turmoil and the IR35 changes coming up.

I still don't understand your point? The company has enough money to maintain the car for 2 years. What's the reason behind not getting a lease again?

[eek]

The lease agreement asks for a fully comprehensive insurance which is what this is. It's not used exclusively for non-company activities? It's used for both personal and company activities. That's allowed.

It is a vehicle registered to the business. To use this vehicle for going to meetings this vehicle MUST be insured. How can you say that it's not expensable? That's nonsense. Expenses if you're self-employed: Car, van and travel expenses - GOV.UK

Oh the joys of HMRC lumping multiple things together and then not providing links to the actual detail.

But you've missed 1 obvious flaw in your argument, a limited company is leasing the car so you are not self employed.

After that the devil is in the detail here as there are probably 1000+ pages of HMRC guidance related to this, so go and ask you accountant or go and find the complete guidance and read the appropriate section.

[cannon999]

You really don't understand what a BIK is, do you...

Put it this way - would you expect Tesco to reimburse you for the costs of driving to their store to do your shopping?

And I assume your insurance covers business usage - not just commuting - which is reflected in the premium...

But yes, YourCo can reimburse you and yes, it would attract personal tax at your highest marginal rate as though it were earned income, because that is what it is.

I don't own Tesco though do I? But I do own the business. I cannot drive the business vehicle without the insurance - it is a requirement of the business lease agreement (and a legal one). So to go to a business meeting - this vehicle has to be insured. This is why I am questioning any BIK due on insurance premiums because you can't separate business from personal here - it is a legal requirement to have the vehicle insured to drive it. Even if I drive it 3 times a year for business use - the price of the insurance wouldn't change.