Company Vehicle or Personal Car

[Gobsheen]

Hi,
Spot the Noob! I know this has been discussed a million times but I struggled to find an answer.....but that could be down to my searching skills.

I'm in my first contract and thinking about changing my car. It's a personal car, not a company car and my mileage claim is worth about £140 a week i.e. I don't do big miles. I'm thinking of either changing to another similar personal car or a company vehicle (most likely a Nissan Navara). I'm not planning to spend too much....about £5-7k.

I'm trying to work out the pro's and con's.

Personal car
- have to pay tax on the money I use to buy it
- can't claim maintenance costs etc
- can claim mileage
- no BIK

Company pick-up
- lets get it out of the way.....I've fancied getting a pick-up for years! Maybe I just need to do it, to get it out of my system!
- Can purchase pre-tax
- Can insure, maintain etc through the company....again pre-tax
- have to pay vehicle and fuek BIK.....but low as it's a commercial vehicle
- poor mpg.....but I don't do very many miles
- VAT - I'm in the flat rate scheme.....can I claim back the VAT as it's over £2k?

I'm sure plenty of you have been through all this before and are familiar with the reality of it. Any guidance would be really appreciated.

[SimonMac]

Personal Car, if you want to know why improve your searching skills

[Sockpuppet]

Unless you get a VAT qualifying vehicle (i.e. one that has been owned by a business from new) then there is no VAT to reclaim on second hand.

For £5k I would buy as personal. You'll pay tax on £3000 a year for having it as a van so after ~2 years you've paid more than if you bought it outright.

Ok, saving on fuel etc but there is also tax to pay on that.

Best idea is to work out 45p per mile vs Navara. I'll suggest 45p per mile is better value.

[northernladuk]

I'm sure plenty of you have been through all this before and are familiar with the reality of it. Any guidance would be really appreciated.

Best guidance here, as already mentioned, is to brush up on your search skills. This has been ask many many times and there are some good threads explaining the detail.

Have a look at this sticky explaining how to do a google search on the forums. Check this area of the forum for the term 'company car' and all will be revealed.

http://forums.contractoruk.com/welco...uk-forums.html

[Gobsheen]

Thanks guys. Realised now that I'd misunderstood the van BIK stuff.

I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.
I must improve my searching skills.

[northernladuk]

BIK aside I don't believe HMRC will accept a pickup unless you use it to pick stuff up. Just1morethan makes the comment here...

Something to consider...

http://forums.contractoruk.com/accou...e-pick-up.html

[Gobsheen]

Good point I hadn't thought of. Where's the tax man's sense of fun?!

[northernladuk]

Good point I hadn't thought of. Where's the tax man's sense of fun?!

Too many people trying to take the piss drained the fun out of him............

[Jessica@WhiteFieldTax]

On the issue HMRC denying relief for a company van for a contractor, as a accountant in practice (1) I've not known them do it and (2) I'm not sure how they could do it and the law on deductions and benefit in kind is pretty clear and has nothing in it about need / appropriateness.

On cars, you need to do the maths, but 99 out of 100 it comes down to owning it personally and calming mileage.

[BolshieBastard]

BIK aside I don't believe HMRC will accept a pickup unless you use it to pick stuff up. Just1morethan makes the comment here...

Something to consider...

http://forums.contractoruk.com/accou...e-pick-up.html

And is what I've said in the past. HMRC closed that particular loop hole a few years ago to prevent all these businesses using pick ups, claiming back VAT when they didnt use the vehicle for it's intended purpose.

Besides that, if people buy these crew cab type pick ups, they have different speed limits on the roads so, if you arent careful you can get snapped by the cameras doing 50 on a road that may have a limit of 40 for these vehicles whereas PLG's wont.