Company car lease

**r0bly0ns** · 7 August 2007, 08:26

I am not sure of the exact implications on this, but our accountant advised us against company cars because of 'Extra NI liability'.

He stated that we would be far better off paying mileage allowance for personal cars.

We do do a lot of business miles though, > 5k

**ASB** · 7 August 2007, 09:11

Between approx 3k and 8k extra personal tax to pay I think, depending on your circumstances and the model. There are a bunch of calculators out there that would help.

Personal contract of some description might be better. Basically if the company provides you with the vehicle you will pay the running costs on the company but get taxed on approx 35% of the list price of the vehicle per year.

**VinnyB** · 7 August 2007, 09:14

I believe (and plenty on this forum know better than me) this will be classed as a Benefit in Kind as it will be difficut for you to prove that it's used exclusively for your business. Its difficult for people to declare a crappy old van solely for business use, so an RR Sport will be impossible to convince one of Hectors Henchmen. You will have to declare it on your personal tax form and will be taxed accordingly.

BTW, £425+vat per month, what's the down payment? A rare as Hens teeth that sort of deal.

Final point: see what your accountant says.

**Jason D** · 7 August 2007, 12:14

Leasing

Originally posted by tbooth

I am the director of my own company only been running a year and am thinking about car lease some people seem to be against it.

I am looking at a range rover sport around 425 + vat per month as this money comes out as a company expence no corporation tax is paid or tax if i was to draw it out as wages i know my personal tax would change but i canot see i would not be that much worse off. i dont travel that many miles to claim millage allowance and if i take into account the depreciation on the car i have now and finance interest it seems a good option on paper, or am i seeing this completly wrong !!

would be gratefull for any input from you more knowlegable people out there.

Tony Booth

Not a good idea in most cases.

The BIK will be a % of the list price new depending on emissions (differering between 15 - 35%) - for a higher rate taxpayer this gives a significant additional income tax bill. Additional NI for company.

The company will only be able to reclaim 50% of the VAT.

The company will also be an element disallowed for CT purposes as the value of the vehicle will be over 12k.

The formula for this will be:

£12000 plus list price divided by 2 x list price

Example - list price £30k

£42,000/£60,000 = 70% therefore 30% disallowed for CT.

www.dormerfinance.co.uk

**tbooth** · 7 August 2007, 20:24

BTW, £425+vat per month, what's the down payment? A rare as Hens teeth that sort of deal.

Final point: see what your accountant says.[/QUOTE]

3 months up front on a 2 year contract just made me think could not afford to buy one but looked like a good deal to me

my accountant is working out some figures for me but it sounds like it might not be worth it !!!

thanks for reply

**Sockpuppet** · 8 August 2007, 02:40

Dont get an RR sport.

Mainly becuase it will make me view you as a ***** and someone that doesnt relly give a damn about a carbon footprint (i'm not an eco warrior but I dont like to take the piss).

Also it may cause me to drive into you in my lorry.

**ndoody** · 9 August 2007, 14:06

Someone was telling me that you can get away with alot of tax if you have something that can carry a minimum load of some tonne which includes some of the pickup trucks?

I could see myself in one of those warrior animals, especially if the tax was riht.

Company car lease