Buying an electric car

[malvolio]

There's nothing to stop YourCo buying a car. It's the personal benefit that is the question and always has been, and why the buy it personally and charge it option usually made more economic sense.

With the EV benefits the picture has changed somewhat, but what we don't know is how using company money to buy a personal asset is affected. I don't see a car as being any different to a summerhouse or a 54" plasma screen if it is never used for the business in any way, it's just another company asset. So the BIK question is a little unresolved.

The VAT position is clear, however. You can't claim input VAT on expenditure that is not made for the company's business or its furtherance.

[eek]

There's nothing to stop YourCo buying a car. It's the personal benefit that is the question and always has been, and why the buy it personally and charge it option usually made more economic sense.

With the EV benefits the picture has changed somewhat, but what we don't know is how using company money to buy a personal asset is affected. I don't see a car as being any different to a summerhouse or a 54" plasma screen if it is never used for the business in any way, it's just another company asset. So the BIK question is a little unresolved.

The VAT position is clear, however. You can't claim input VAT on expenditure that is not made for the company's business or its furtherance.

It's not unresolved - the NI and tax due on the benefit of personal use of a company car (even a second car for the Mrs) has been known about and documented in tax manuals for decades.

The fact that it's insanely generous for EV cars doesn't mean anything beyond it's insanely generous and a great tax break if you can make use of it.

Personally I'm waiting to see what the next Gen Mini / MG roadster look like.

[northernladuk]

Yes. BIK on a company car is based on the car being available to the employee for private use. So if it was available 365 days a year, then the BIK is calculated on that basis. If it was for 6 months, you disclose that on the P11D and tax it accordingly.

And the same goes for reclaiming VAT?

[eek]

And the same goes for reclaiming VAT?

Lease - 50%
Purchase - blocked so not recoverable.



Motoring expenses (VAT Notice 700/64) - GOV.UK (www.gov.uk) and VAT on the Purchase of a Car - Vantage Fee Protect if you want a readable version

[northernladuk]

Lease - 50%
Purchase - blocked so not recoverable.



Motoring expenses (VAT Notice 700/64) - GOV.UK (www.gov.uk) and VAT on the Purchase of a Car - Vantage Fee Protect if you want a readable version

Yes but the slight difference I've seen with the VAT is that guide and others specifically mentions business use and no reference to the 'available to employees'

However, if you lease a car that is to be used both for the business and privately or is available for private use you will be able to claim 50% of the VAT incurred on the lease.

The wording has been more specific for VAT as business use, not just available. Do we assume 'available to use' covers it or does there have to be actual use for VAT.

[Craig@Clarity]

Lease - 50%
Purchase - blocked so not recoverable.



Motoring expenses (VAT Notice 700/64) - GOV.UK (www.gov.uk) and VAT on the Purchase of a Car - Vantage Fee Protect if you want a readable version

Exactly this. If leased, 50% of VAT blocked for private use. All VAT blocked for the purchase.

[pintofale]

Many thanks Craig, appreciate your expert opinion, and thanks for pointing out that BIK is on the list price - seems a little unfair to me but since it's only 2% it would be churlish to complain! You mentioned lowering BIK if the car is only "available" for (say) 50% of the year - does this imply and require business use for the other 50%, or could the car be merely unused for that 50%? So for example if you typically only use the car at weekends would you declare BIK based on 100 out of 365 days?

[WTFH]

Many thanks Craig, appreciate your expert opinion, and thanks for pointing out that BIK is on the list price - seems a little unfair to me but since it's only 2% it would be churlish to complain! You mentioned lowering BIK if the car is only "available" for (say) 50% of the year - does this imply and require business use for the other 50%, or could the car be merely unused for that 50%? So for example if you typically only use the car at weekends would you declare BIK based on 100 out of 365 days?

It's not about when you "typically use it", but when it's available to you. So, unless your company has other employees (not family members at the same address as you) who are given the car for x days of the year, then it's 100% your BIK. If it's parked at your house and the set of keys are kept in your house, then the BIK is 100% with you.

[Fred Bloggs]

Many thanks Craig, appreciate your expert opinion, and thanks for pointing out that BIK is on the list price - seems a little unfair to me but since it's only 2% it would be churlish to complain! You mentioned lowering BIK if the car is only "available" for (say) 50% of the year - does this imply and require business use for the other 50%, or could the car be merely unused for that 50%? So for example if you typically only use the car at weekends would you declare BIK based on 100 out of 365 days?

You'll have a hard time getting that past HMRC. You are charged BIK whether you use it or not because the rules says it's available for use even when you don't use it. For example, I tried to persuade HMRC not to tax me BIK on a company car when I had to regularly travel overseas for work. The car would be parked at the airport and I'd be thousands of miles away. My request was rejected because even though I was in a different country, the car was still available for personal use.

[ladymuck]

You'll have a hard time getting that past HMRC. You are charged BIK whether you use it or not because the rules says it's available for use even when you don't use it. For example, I tried to persuade HMRC not to tax me BIK on a company car when I had to regularly travel overseas for work. The car would be parked at the airport and I'd be thousands of miles away. My request was rejected because even though I was in a different country, the car was still available for personal use.

Similarly, my Dad got a huge BIK bill for a company van that was fully sign written up for the firm he worked for. Because the van was assigned to him and kept at his house overnight / when on holiday, etc. he had to pay quite a lot for it. So we all used to use it at weekends for tip runs, moving house, anything that might be ever-so-slightly awkward to get into the car boot, etc.