Buying an electric car

**malvolio** · 30 December 2022, 19:02

There's another thread about something similar been rumbling on for a while now. The quick summary is how do you justify YourCo buying something for your personal use when it is not ever used for YourCo's business?

You and YourCo are two entirely separate entities. You might as well ask Tesco to buy it for you.

**pintofale** · 30 December 2022, 20:07

Thanks for the link to the other thread. Seems to be getting a bit heated over there so I think I will stay on this one. It looks like a couple of those guys are saying the car can be bought as a director perk, just like my SIPP comtributions are a perk. I agree with this view, so will buy it through my company, declare and pay the BIK (which won't be much as the vehicle will be used and therefore cheaper) and the company will pay the insurance etc. Thanks to all for the help!

**malvolio** · 30 December 2022, 21:23

Originally posted by pintofale View Post

Thanks for the link to the other thread. Seems to be getting a bit heated over there so I think I will stay on this one. It looks like a couple of those guys are saying the car can be bought as a director perk, just like my SIPP comtributions are a perk. I agree with this view, so will buy it through my company, declare and pay the BIK (which won't be much as the vehicle will be used and therefore cheaper) and the company will pay the insurance etc. Thanks to all for the help!

OK, it's your company and your court case. 🙄

**Lance** · 30 December 2022, 22:59

Originally posted by pintofale View Post

the car can be bought as a director perk, just like my SIPP comtributions are a perk. I agree with this view,

you might agree with this view but it's wrong.
A company car is nowhere close to comparable with employer SIPP contributions.

They might be a 'perk'. But 'perk' is a meaningless word.

One is a benefit in kind. And also an asset.
The other is a company expense.

Not even slightly close.

**northernladuk** · 30 December 2022, 23:51

Seems very strange you are able to buy a company vehicle that is purely used personally. Doesn't make sense really.

Another thing to consider, it's only really worth buying an electric car through the company if you were going to buy one anyway. Electric cars are still expensive to buy, even a normal new car is expensive. If you are not the type that likes buying new cars then it's not a good idea as you are going to be paying for it during the worst period of depreciation. I don't think anyone has done the sums yet but it's hard to think that buying a new electric car though the company is going to be financially advantageous vs a 3 year old one privately.
That said if you are desperate to buy a brand new electric car then yes, it's the best way to do it.
If you doin't mind owning a second hand car over 3 years old then I don't think the company electric car is cheaper regardless of the tax breaks.

**Craig@Clarity** · 3 January 2023, 10:43

Originally posted by pintofale View Post

Hi all, I am a software consultant, I work full time on PAYE and do some consultancy through my limited company. I use all of the compmay income as employer pension contributions into my SIPP, which makes the accounts simple. I would like to buy an electric car (or van), and it looks like buying through my company would be a good idea. The company has enough cash right now to buy a second hand vehicle outright, and I believe this would be 100% tax deductable at the time of purchase. I would not use it for business, all the usage would be personal. I think I would have to pay BIK at 2%, which would only be a couple of hundred a year. This seems too good to be true, so I must be missing something! Anyone see any problems with my plan?

Nope. Electric cars are attractive since the BIK percentage is low. My answer with anyone asking if a company car is allowed is always yes. The consideration going down this route is to record and declare the correct BIK, class 1A NIC and personal tax associated. Bear in mind, the BIK is calculated on the list price and not the second hand value you purchased it for. That stung a lot of people when they went with fuel guzzling cars bought for a few grand, not realising the list price is in it's thousands.

Also, note that the vehicle is a company asset and not a personal one so you'd have to look at the commerciality of it and insurance costs.

**northernladuk** · 3 January 2023, 11:16

Originally posted by Craig@Clarity View Post

. My answer with anyone asking if a company car is allowed is always yes.

Even if there is zero business use?

**eek** · 3 January 2023, 11:33

Originally posted by northernladuk View Post

Even if there is zero business use?

Yes - that's been a known use case since at least the 1970s

**Craig@Clarity** · 3 January 2023, 12:31

Originally posted by northernladuk View Post

Even if there is zero business use?

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.

Buying an electric car