Company Car

[jason986]

I have a limited company and both myself and my wife are employees. My wife is not a 'disguised' employee as she genuinly does work through the company generating fees.

As I do a high mileage I have always purchased my own car and thus claimed the 40/25p mileage back which has proved worth doing.

However my wife does not travel far and claims almost no expenses as she only drives to local clients once a week. She probably does less than 50 business miles per month.

We both get paid the minimum wage which I think equates to just under £800 per month. Then we pay divi's every 3 months or so.

After all that rambling (just trying to give you a background to our situation) my question is that would it be ok for my wife to lease a car through the company. Are there any financial downsides to this? The car would mainly be used as a mummy truck with only about 20% business use.

[ASB]

I have a limited company and both myself and my wife are employees. My wife is not a 'disguised' employee as she genuinly does work through the company generating fees.

As I do a high mileage I have always purchased my own car and thus claimed the 40/25p mileage back which has proved worth doing.

However my wife does not travel far and claims almost no expenses as she only drives to local clients once a week. She probably does less than 50 business miles per month.

We both get paid the minimum wage which I think equates to just under £800 per month. Then we pay divi's every 3 months or so.

After all that rambling (just trying to give you a background to our situation) my question is that would it be ok for my wife to lease a car through the company. Are there any financial downsides to this? The car would mainly be used as a mummy truck with only about 20% business use.

The downside is the company car tax you pay. You'll find it on the IR website.

[Darren@UptonAccountants]

Company car

And the Class 1a National Insurance on the benefit in kind.

Ask your accountant to do a comparison of the costs/savings.

[ratewhore]

what if its a toyota prius?

[ASB]

what if its a toyota prius?

Everybody laughs ??

There was a good scam involving low emissions, but I expect it's been closed down now.

You could get 100% capital allowances in Y1. So claim the CA and then sell the vehicle to yourself (at a nominal but justifiable price) . You could then sell it on for > the value required to buy another one after allowing for the capital allowance. Bingo, taxman finances all the depreciation.