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BIK on Classic Car

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    BIK on Classic Car

    Hello

    Am trying to work out the BIK on a classic car and just wanted to double check something.

    According to HMRC's rules:

    A classic car is one which:
    - is at least 15 years old on 5 April 2022
    - has a market value of at least £15,000
    - has a market value which is higher than the original list or notional price (including accessories)

    Do all three have to apply in this case? Or just one? Since my case fails on the last clause. When it was brand new it was around £50k, now it's around 15-16k.


    Cheers
    MG

    #2
    All three. The idea is to define a 'Classic' not just an old banger.

    The last one isn't as straight forward as your list looks though. The gov pages use a different term

    https://www.gov.uk/hmrc-internal-man...20ITEPA%202003.

    Which says you also need to read this

    https://www.gov.uk/hmrc-internal-man...anual/eim24015

    Plenty of articles going through it step by step e.g.

    https://www.jsca.co.uk/how-about-a-c...r-company-car/

    Cars are a complex area and you've gone for an even more specialist area so I'd go get professional advice rather than ask a bunch of contractors to be honest.
    Last edited by northernladuk; 6 May 2022, 11:05.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

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      #3
      What is the car and why do you want to put it through the company? Are you working 100% WFH? What's your reasoning for trying to put this through the company?
      'CUK forum personality of 2011 - Winner - Yes really!!!!

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        #4
        I do WFH. But the car is going to have a ton of work done. So seems more tax efficient to put it via the company.

        It seems the car doesn't qualify unfortunately.
        Last edited by mgrover; 6 May 2022, 15:00.

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          #5
          Originally posted by mgrover View Post
          I do WFH. But the car is going to have a ton of work done. So seems more tax efficient to put it via the company.

          It seems the car doesn't qualify unfortunately.
          It doesn't anyway.

          You and YourCo are not the same (legally you and it are separate persons) and I suspect YourCo is not in the business of classic car restoration. You can't simply use one side's money to pay for the other's.

          You need to understand that separation before you get into real trouble.
          Blog? What blog...?

          Comment


            #6
            This sounds like the sort of grubby behaviour that gives contractors a bad name.

            Comment


              #7
              Originally posted by malvolio View Post

              It doesn't anyway.

              You and YourCo are not the same (legally you and it are separate persons) and I suspect YourCo is not in the business of classic car restoration. You can't simply use one side's money to pay for the other's.

              You need to understand that separation before you get into real trouble.
              Well duh, I'd sell the car to the company and the work carried out is just maintenance. Just rust work.

              If the company owned the car it would be responsible for the maintenance.

              The separation is fairly obvious given I'd pay tax on it.

              Comment


                #8
                Originally posted by TheDude View Post
                This sounds like the sort of grubby behaviour that gives contractors a bad name.
                What following the law to the letter and paying the Benefit in kind tax required?

                ​​​​​​The ******* audacity...

                Comment


                  #9
                  Originally posted by mgrover View Post

                  Well duh, I'd sell the car to the company and the work carried out is just maintenance. Just rust work.

                  If the company owned the car it would be responsible for the maintenance.

                  The separation is fairly obvious given I'd pay tax on it.
                  Why doesn't the company buy the car then sell it back to you on completion at market rates...? You realise that the VAT probably wouldn't be reclaimable I suppose?

                  It would be cheaper and considerably less suspicious to take a loan or a dividend from the company and do it yourself, especially if you're aiming to pay the taxes anyway. Anything else is simply making things difficult.

                  It's no different to buying a personal company car, and the advice on that for many years has been that it is not worth the hassle.
                  Blog? What blog...?

                  Comment


                    #10
                    Originally posted by mgrover View Post

                    What following the law to the letter and paying the Benefit in kind tax required?
                    Not really. There are certain carry ons HMRC will see as aggressive tax avoidance i.e. you've gone one step too far and this would be one of them. You've entered in to a tax situation that is not driven by the business and is only there to avoid tax. A company car you don't need that then suddenly needs 1000's of pounds spending on it won't sit well with HMRC.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

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