Originally posted by legal
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Company cars - seems to be a new rule in HMRC 480 since 2013
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Originally posted by northernladuk View PostRemember at the end of the day it is only 20% discounted. Comes out of your pocket at the end.
Just to bring home the point today I forked out £450 for new front brake disc/pads, renew brake fluid and one rear light for the wife's car - this was money that was net of HRT.This default font is sooooooooooooo boring and so are short usernamesComment
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Originally posted by MPwannadecentincome View PostIf I re-imburse the company for private use of the car of course I am using money that has been taxed but if I put £2000 back into the company on £2000 worth of BIK I am saving Employer's NI (£276) plus Employee's NI (£40) plus 40% tax (£800) which totals £1116. If I try to take this out of the company again as divis at higher rate I pay effectively £800 tax thus saving £316.
Is that correct?Comment
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Originally posted by Sockpuppet View PostThe only way to work out if the car is good value is to work out if the BIK charge is more or less than the car would cost you per year to run including depreciation etc. What care were you thinking, what's it going to cost?
Historically with private cars I have never bought from new, at best 1 year old but sometimes 3 years old and kept the car for at least 6 to 10 years which for me has minimised depreciation which is often the single biggest cost as I have bought cars for cash. I can't do that now as I have large debts so finance costs have to be counted as well as servicing, repairs, maintenance, car tax, MOT.
You are right I have to do the calculations for my situation to compare against predicted overall BIK - I will not know the true balance of private vs company mileage until the end of the year. So what car I buy will be a complex determination of all the factors and costs involved ;-)
The point of this thread actually was to find out if anyone was already following the new rule and re-imbursing the LtdCo for private use and how they were calculating how much to re-imburse. Seems that nobody is doing it, so I will take advice from an accountant on this question when I have appointed one.This default font is sooooooooooooo boring and so are short usernamesComment
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Buying an old car to minimise depreciation in your case won't be helpful. You need a car with high depreciation to offset against the corporation tax to make having the car a benefit to yourself.
Otherwise you'll end up paying BIK on a high cost (new list price) but the actual cash money you'll save will be minimal as the majority of the car is already depreciated.Comment
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Originally posted by Sockpuppet View PostBuying an old car to minimise depreciation in your case won't be helpful. You need a car with high depreciation to offset against the corporation tax to make having the car a benefit to yourself.
Otherwise you'll end up paying BIK on a high cost (new list price) but the actual cash money you'll save will be minimal as the majority of the car is already depreciated.This default font is sooooooooooooo boring and so are short usernamesComment
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Originally posted by Sockpuppet View PostI'm not sure what you'd hope to gain.
You get a BIK of £2k so you pay £2k back to your company to cancel out the BIK charge?
BooComment
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Originally posted by MPwannadecentincome View PostThat's ok I can sell the car really cheap from company to myself at disposal time ;-)Comment
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Originally posted by Sockpuppet View PostYou mean at market value else it would also attract a BIK chargeThis default font is sooooooooooooo boring and so are short usernamesComment
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