Advice needed on car insurance for company car

[Madmax86]

I appreciate all the comments.


I am in no way trying to play the system, I am simply making use of the tax incentives available to me.


What I am doing is very common. Nearly every EV company promotes the benefits of buying an EV through the company and only paying 2% BIK tax. You only have to have a quick look on any Tesla, polestar, or any other EV forum of how common this route is. It is a no brainer if you want an EV and have a company. That is not a grey area so I’m surprised at the responses on this forum implying I am committing some serious fraud.


I have been open and honest with everyone I have dealt with including my accountant who has advised me to add business use to my car insurance policy for good measure but is doubtful it will even be needed, but for peace of mind.


As for what I am doing about VAT, I will claim 50% of the leasing costs as it will be for personal use.

[malvolio]

I appreciate all the comments.


I am in no way trying to play the system, I am simply making use of the tax incentives available to me.


What I am doing is very common. Nearly every EV company promotes the benefits of buying an EV through the company and only paying 2% BIK tax. You only have to have a quick look on any Tesla, polestar, or any other EV forum of how common this route is. It is a no brainer if you want an EV and have a company. That is not a grey area so I’m surprised at the responses on this forum implying I am committing some serious fraud.


I have been open and honest with everyone I have dealt with including my accountant who has advised me to add business use to my car insurance policy for good measure but is doubtful it will even be needed, but for peace of mind.


As for what I am doing about VAT, I will claim 50% of the leasing costs as it will be for personal use.

And you are still not hearing the substantive point. The company cannot and must not pay for your personal expenses - which you can define as those totally unrelated to its business and which you are emphasising is what applies here - unless you are paying the full taxes on the costs as a BIK.

It's not that hard to understand but first, you have to try to do so. We do know what we're talking about, in my case on the back of nearly 30 years contracting and quite a lot of it arguing about taxation and the split between company and personal monies, but we are not accountants and it's possible, if unlikely, we are missing something. Once again I suggest you ask either HMRC or an accountant fully versed in contracting laws what they think about your precise expectation. And if you are right, we would love to be told so.

What does you accountant professionally know about insurance, I wonder, since his answer is a long way from what I would expect from one. Have you put our concerns to him, for example, and why we are raising them?

Ultimately, as I said earlier, it's your court case. But we remain unconvinced by your arguments.

[northernladuk]

As for what I am doing about VAT, I will claim 50% of the leasing costs as it will be for personal use.

I was of the understanding there has to be some business use for this to happen. If there is no business use at all you can't claim it?

https://www.gov.uk/guidance/partial-...vat-notice-706

2.2 VAT on non-business activities


VAT you incur on purchases that are used exclusively for non-business purposes is not input tax and you cannot recover it.

The whole idea of claiming VAT back for something you don't use as a business is part of the problem Mal is pointing out that your company is buying you a car the company won't be using. You are using business excemptions but not using it for business.

And from what I've read on here pissing HMRC off is one thing. The VAT man is a totally different matter.

[Madmax86]

And you are still not hearing the substantive point. The company cannot and must not pay for your personal expenses - which you can define as those totally unrelated to its business and which you are emphasising is what applies here - unless you are paying the full taxes on the costs as a BIK.

It's not that hard to understand but first, you have to try to do so. We do know what we're talking about, in my case on the back of nearly 30 years contracting and quite a lot of it arguing about taxation and the split between company and personal monies, but we are not accountants and it's possible, if unlikely, we are missing something. Once again I suggest you ask either HMRC or an accountant fully versed in contracting laws what they think about your precise expectation. And if you are right, we would love to be told so.

What does you accountant professionally know about insurance, I wonder, since his answer is a long way from what I would expect from one. Have you put our concerns to him, for example, and why we are raising them?

Ultimately, as I said earlier, it's your court case. But we remain unconvinced by your arguments.

I do hear what you are saying. I guess I am bending the truth in saying that car is for business use when in reality it will not be used for business. In doing so allows me to claim 50% Vat in costs. Is it something that shouldn't be allowed? Maybe. But the fact is, it does allow me to do what I want to do and my accountant is confident there is no real risk in doing so. As said, it's very common, even on this thread is someone else that has done it.

[malvolio]

I do hear what you are saying. I guess I am bending the truth in saying that car is for business use when in reality it will not be used for business. In doing so allows me to claim 50% Vat in costs. Is it something that shouldn't be allowed? Maybe. But the fact is, it does allow me to do what I want to do and my accountant is confident there is no real risk in doing so. As said, it's very common, even on this thread is someone else that has done it.

Well apart from it being VAT fraud...

The paper nluk highlighted states towards the very top that VAT on purchases not related to the business or the furtherance of its aims are not eligible for VAT reclaim. A condition that covers your plan

I think you need a better accountant. Yours is an idiot.

[Madmax86]

...that VAT on purchases not related to the business...

But I will state that it is used for business as well as personal, adding business use to my car insurance policy should help

[Madmax86]

Well apart from it being VAT fraud...

A bit like mortgage fraud when you rent out a property on a residential mortgage instead of a buy to let mortgage and not tell the lender.

Is it mortgage fraud? Yes.

Do thousands of people do it and get away with it? Also yes.

[northernladuk]

But I will state that it is used for business as well as personal, adding business use to my car insurance policy should help

Should help? Well not having it you are slam dunk committing evasion as without it you can't even do any business in it to meet the basic critera. Now I know you are just taking the piss with all this and are willing to do or say whatever it takes to get it through rather than what the rules allow.

Although adding an insurance policy will do absolutely no good when they come to check. You don't think they just look at your insurance and walk away? They'll go through absolutely everything with a fine toothed comb.

But stating that is an outright lie, you know it and we know it. If you are down for outright lying to get what you want then this thread is utterly. pointless

[northernladuk]

A bit like mortgage fraud when you rent out a property on a residential mortgage instead of a buy to let mortgage and not tell the lender.

Is it mortgage fraud? Yes.

Do thousands of people do it and get away with it? Also yes.

Do alot of people do it and don't get away with it? Yes.

That isn't really mortgage fraud anyway, it's breaching the terms of your agreement with the lender. Residential and BTL have different risk levels so have different rates. It's not really fraud.
Fraud is obtaining a mortgage by total deception.

Mortgage fraud can include:

• over-valuing properties
• overstating a salary or income
• hijacking genuine conveyancing processes
• taking out mortgages in the name of unsuspecting individuals or those who are deceased after identity theft
• taking out a number of mortgages with different lenders on one address by manipulating Land Registry data
• changing title deeds without an owner’s knowledge to allow the sale of a property.

Do people do that and get away with it? Very rarely.

But even still it's completely different to defrauding the tax man let alone the VAT man.

[northernladuk]

I think it's pretty clear what you are doing is wrong but it's also pretty clear you don't care and are willing to lie through the back of your teeth to get it so pointless carrying on. Fill your boots and good luck.