Contractors car leasing

[Wanderer]

S'funny. Though it made perfect sense, as well as being factually accurate, especially since you are saying exactly the same thing. Which bit are you having problems with?

I have a problem with several parts of it, primarily your attitude to the poster where you write Stick to your accountant's advice, since you seem to lack a little understanding on what is being proposed.

The original question was quite a fair one and the suggestion from the accountant to "Create a lease agreement between myself and the Ltd Company, where I transfer a monthly lease amount from the business account to my personal account" is completely wrong, complex and unnecessary so the poster is right to question it. Suggesting that the OP "sticks to their account's advice" isn't helpful in my opinion.

[Dickvand]

I have a problem with several parts of it, primarily your attitude to the poster where you write Stick to your accountant's advice, since you seem to lack a little understanding on what is being proposed.

The original question was quite a fair one and the suggestion from the accountant to "Create a lease agreement between myself and the Ltd Company, where I transfer a monthly lease amount from the business account to my personal account" is completely wrong, complex and unnecessary so the poster is right to question it. Suggesting that the OP "sticks to their account's advice" isn't helpful in my opinion.

Thanks for all the advice here, quite a few conflicting answers...lets make this clear...
I own the car personally, so ill be claiming the mileage at 45p.
What I need to understand is....

Can my business pay me for the lease or loan of the car, whilst the car remains personally owned? So for e.g. The co would pay me say £400 per month for the car. The last post seems to suggest no....

[Contreras]

Thanks for all the advice here, quite a few conflicting answers...lets make this clear...
I own the car personally, so ill be claiming the mileage at 45p.
What I need to understand is....

Can my business pay me for the lease or loan of the car, whilst the car remains personally owned? So for e.g. The co would pay me say £400 per month for the car. The last post seems to suggest no....

Not if you want to claim the 45p/mile.

Probably best to get your accountant to clarify precisely what they meant.

[Clare@InTouch]

Thanks for all the advice here, quite a few conflicting answers...lets make this clear...
I own the car personally, so ill be claiming the mileage at 45p.
What I need to understand is....

Can my business pay me for the lease or loan of the car, whilst the car remains personally owned? So for e.g. The co would pay me say £400 per month for the car. The last post seems to suggest no....

I agree with Contreras - it's one or the other. If the car is owned or leased by the company you cannot then also claim the mileage. Mileage is supposed to compensate you for the fuel and running costs of using your personally owned vehicle for business. If it's the company that owns (or leases) the car then why should you be compensated for the wear & tear on something that's not yours?

Ask your accountant to clarify, it was probably just lost in translation somewhere!

[Wanderer]

Ask your accountant to clarify, it was probably just lost in translation somewhere!

With hindsight, I think that is most likely the correct answer....


The bottom line is that you do one of these things:

1. Use your own car and claim 45/25p per mile to cover all the running costs that you incur (this is the simplest option and the recommended one)

2. Get your company to (buy/lease) a car and the company pays for the running costs. Quite complex because HMRC will deem that the car is available for private use so it will become a Benefit In Kind (BIK) and the person who has use of the car will have to pay tax depending on the CO2 emissions of the car. This may be worthwhile if your company car is very low emissions.

3. Get a company van because there are special rules which mean it may be tax efficient. Be careful which van you get because if it has a Maximum Muthorised Mass of over 2,000 kg then there are lower speed limits. A good option is to get a car derived van which has a MAM of < 2,000kg although they are cars converted to goods vans with blanked out windows and no back seats which may put you off.

4. Get a company motorbike - bikes are specifically out of the scope of the rules which would apply to a car or van. This means you can treat the bike as a capital asset and the BIK is only on the private element of the use. If its exclusively for business use then you can reclaim the VAT too. This one will make your accountant scratch their head (and probably hate you) but apparently it is doable.

5. Get on your bike! Your company can pay you 20p/mile if you ride a bicycle.

Options 3 to 5 are a bit off the wall but may be worth considering depending on your circumstances. Anything other then option 1 or 5 will require professional advice which is probably beyond the scope of what we can provide here.

[Clare@InTouch]

4. Get a company motorbike - bikes are specifically out of the scope of the rules which would apply to a car or van. This means you can treat the bike as a capital asset and the BIK is only on the private element of the use. If its exclusively for business use then you can reclaim the VAT too. This one will make your accountant scratch their head (and probably hate you) but apparently it is doable..

Good suggestion, we have a few clients who do this. You only pay BIK on 20% of the asset value when it was first provided, and that can be further reduced for business use, so quite cost effective if you like bikes.

[TheFaQQer]

Good suggestion, we have a few clients who do this. You only pay BIK on 20% of the asset value when it was first provided, and that can be further reduced for business use, so quite cost effective if you like bikes.

Don't let my wife read this, please.

[northernladuk]

4. Get a company motorbike - bikes are specifically out of the scope of the rules which would apply to a car or van. This means you can treat the bike as a capital asset and the BIK is only on the private element of the use. If its exclusively for business use then you can reclaim the VAT too. This one will make your accountant scratch their head (and probably hate you) but apparently it is doable.

[Clare@InTouch]

Don't let my wife read this, please.

Ooooh bribery!

"Dear Mrs FaQQer........."

[northernladuk]

5. Get on your bike! Your company can pay you 20p/mile if you ride a bicycle.

So I can claim 20p/mile for the company bike? That willl make up for the lack of secretarial work she does I pay for and don't get.