Leasing a car

[chrisl]

If a car is leased in the company name i guess there would be a benefit in kind charge and i also assume that mileage can not be claimed at 40p per mile.

If this is true, if i reimburse the company 50% of the lease cost for my private use so i dont actually get the BIK charge, would i then be able to claim mileage?

Im just trying to work out the best way to claim mileage/buy a car.

[northernladuk]

There are a few threads about cars on here (hint) but none actually give a definate answer rather annoyingly.

It appears that there are a number of factors that decide whether it is worth it or not. Just the fact that it is an accumulation of factors makes me think it is such a tight thing its not worth doing. e.g. you have to do very little home mileage, if your circumstances change and you get a gig next door the car will become a tax millstone you can't get rid off.

It appears things that would have to work is large work mileage+minimal private. High value low emissions cars.

Thats all I can glean from the responses in the past.

In a nutshell this is one for your accountant as there is no sweeping answer.

[Clare@InTouch]

The benefit in kind is based on the fact that the car is available to you, not how much you actually use it personally (although the value of the benefit would be reduced if you make a capital contribution). The definition of available according to HMRC is very harsh, and nigh on impossible to get around unless it's a genuine pool car.

There is an additional BIK if the business pays for all fuel.

If the business pays for business fuel and you pay for your own fuel, it simply means there won't be the extra tax charge on the fuel part. You can't claim mileage - bear in mind that mileage rates are set at a level to reimburse you for wear and tear too, so if it's not your own car you shouldn't be reimbursed for that.

[malvolio]

True, but even my fairly modest four-year-old wagon costs more than 40p a mile these days...

[BolshieBastard]

If a car is leased in the company name i guess there would be a benefit in kind charge and i also assume that mileage can not be claimed at 40p per mile.

If this is true, if i reimburse the company 50% of the lease cost for my private use so i dont actually get the BIK charge, would i then be able to claim mileage?

Im just trying to work out the best way to claim mileage/buy a car.

50% of the lease cost would be more than the benefit you be able to claim mileage even at 40p for the first 10k!

I investigated lease cars considerably when looking for a new car and the market was in the doldrums.

Unless you find a model no one wants or its at the end of productions, you wont get truely great deals now.

Cheap lease deals also generally means you dont get the car you really want.

Best way to 'buy' the car on a PCP. You wont have the same kind of lock in agreement as a lease. A lease means whether you can afford the car or not for the term, if you want to hand it back you still have to pay the full lease (some lease co's do have a 'hand back' clause but, these are very expensive).

You've also got to watch for the 'hand back' charge at the end of a lease where they inspect the car for any damage or scratches. A scratch more than an inch long will incurr charges to repaint it. Under the front bumper is a good place they find lots of scratches and dents.

Mate of mine handed his E class back after 2 years motoring. He was told it was by the guy who collected it and inspected it that it was the best condition he'd seen a car handed back. MB stiffed him for over £600 paint touch ups!

The lease industry makes millions of pounds from these charges. So, buyer (leasee) beware!

[Clare@InTouch]

True, but even my fairly modest four-year-old wagon costs more than 40p a mile these days...

Totally agree - HMRC are well overdue in updating their mileage rates to keep up with the real world.

[BolshieBastard]

Totally agree - HMRC are well overdue in updating their mileage rates to keep up with the real world.

Hahaha! Yeah we know that but there's no way they will!