Reply to: Company car and reasonable use

[andyc2000]

Oooh company car chat and electric/BIK. Current car is 13 years old, 120k on the clock. I've been looking at leasing a RAV4 - need a reasonable sized boot. Accountant said don't bother with that as a company car and then pointed out BIK for full EV is frozen at the 1% band next tax year and 2% until 2025. So I started looking at EVs, I don't think I'll get range anxiety so it opened up a few options... I then did all the other calculations (assuming 10000 miles a year - fuel, insurance, servicing) and I think I figured it all out, but an e-tron or an EQC comes out at only about £50 a month more than the RAV4 privately. A Kia E Niro is massively cheaper - but I think the UK allocation of those is used up. I compared it to the fancy 'Dynamic' RAV 4 to get it past the powers that be.
Just waiting to see if I can get a tow hook on it...

[parallelmonogamist]

Why on earth would you buy an electric car? BIK tax is currently pretty much free on electric vehicles. Just lease the company car and enjoy the Tesla legally. Buying electric cars is pointless anyway - they will lose value quickly as the batteries are getting better all the time. I am currently leasing an electric car at roughly £250/month. It hits the pocket at roughly £125/month so pretty much 50% off. And doing that means that you will also have your company pay for insurance etc etc.

Depends on the car. My last one I lost £1k over a year of ownership. This is for a car you pay £1k a month to lease.

[jainnode]

I could understand it if my accountant had posted it.

ftfy

[northernladuk]

I can understand it with bikes...

I could understand it if anyone else had posted it.

[eek]

Course you did.

I can understand it with bikes...

[jainnode]

Course you did.

yep.

[northernladuk]

this. i bought a bike from a dealer, and sold it to WBAB two years later for 2k more than i paid.
happy days.

Course you did.

[jainnode]

to be fair WBAC prices are often just fine. It all depends if there's more wrong in the car than the agent can spot.
I've taken them to cleaners with a Range Rover. They think they knocked me down £2k, but actually they still paid £1.5k too much for it.

this. i bought a bike from a dealer, and sold it to WBAB two years later for 2k more than i paid.
happy days.

[Lance]

Well it was good for a laugh! I thought it was a serious set of questions until I read number 2. Who on earth thinks buying a 40+ grand car for wifey, who just does 'standard PSC work' via the company, is legit? Why would anyone want to sell at 'WBAC' price except to introduce an artificial loss?

Pass the popcorn. This should be in General methinks.

to be fair WBAC prices are often just fine. It all depends if there's more wrong in the car than the agent can spot.
I've taken them to cleaners with a Range Rover. They think they knocked me down £2k, but actually they still paid £1.5k too much for it.

[TheDogsNads]

I'm familiar with the technical aspects of getting a company car, as a PSC.

What I'm unsure about is the possibility of HMRC taking a dim view of possibly taking the p1ss.

Scenario 1: The company buys a Tesla for me, despite perhaps not really needing to drive anywhere for work at the moment. Any risk in this?
Scenario 2: The company buys my wife one as well? She's doing the standard PSC admin work. Expect a knock on the door?
Scenario 3: Company sells the Tesla at "We buy any car" quoted price, then buys another one soon after. Having a laugh yet?
Scenario 4: Company does the same every year. Will the director find his legs in irons?

This is purely hypothetical of course and I wouldn't dream of doing scenario 4, but it would be good to get a steer on possible difficulties with Hector.

(I do have an accountant, based in Brighton, but they're not very helpful.)

thanks.

Well it was good for a laugh! I thought it was a serious set of questions until I read number 2. Who on earth thinks buying a 40+ grand car for wifey, who just does 'standard PSC work' via the company, is legit? Why would anyone want to sell at 'WBAC' price except to introduce an artificial loss?

Pass the popcorn. This should be in General methinks.

[Craig@Clarity]

Short answer is your company can purchase a car and provide it to you as the employee. Same for your wife. Account for the BIK at 1% (2% in 2022-23) and on your tax return. Pay back 4p per mile on any personal mileage used if the company pays for the electric or claim back 4p per mile if you pay for the electric.

[eek]

Why on earth would you buy an electric car? BIK tax is currently pretty much free on electric vehicles. Just lease the company car and enjoy the Tesla legally. Buying electric cars is pointless anyway - they will lose value quickly as the batteries are getting better all the time. I am currently leasing an electric car at roughly £250/month. It hits the pocket at roughly £125/month so pretty much 50% off. And doing that means that you will also have your company pay for insurance etc etc.

+1 - an electric company car (or one purchased through salary sacrifice) is just about the best tax advantage you can grab.

[cannon999]

Why on earth would you buy an electric car? BIK tax is currently pretty much free on electric vehicles. Just lease the company car and enjoy the Tesla legally. Buying electric cars is pointless anyway - they will lose value quickly as the batteries are getting better all the time. I am currently leasing an electric car at roughly £250/month. It hits the pocket at roughly £125/month so pretty much 50% off. And doing that means that you will also have your company pay for insurance etc etc.

[parallelmonogamist]

I'm not sure what you were expecting. The professional forums are for serious questions and should expect a serious answer. By complaining about a po-faced response that implies you were joking, in which case why did you not put this in General so we could all have a laugh and not get banned for it?

I thought I'd explained that it was a bit of both. This kind of "taking it to the nth degree" question is useful for gauging boundaries and acceptable use.
It wasn't a complaint about the po-faced answers. But anyway, I do appreciate the answers as always.

[eek]

Being blunt the question is just "at which point does tax avoidance step into fraud and tax evasion."

And when you look at it like that you can see why I didn't bother to respond earlier.