Reply to: Gifting a company car - corrections on way to do this correctly.

[NotAllThere]

any chance of moving this to General??

I wish. That part of the software is still not fixed.

[cojak]

Socialism whilst some bits are good is clearly in the air, its main fault is the animosity of "Mondeo man" with the neighbours "Ooh what's he getting? I must have better " coupled with the false " Oh if he has more = i have less" which is the root psychology of these nasty replies. These kind of S.O.A.B's i don't have time for.

You do realise that you’re talking to IT contractors, don’t you? Many of whom will dance on Keir Hardie’s grave and turn up with the flashiest car in the client’s car park (£87k? Phfft..)

What they don’t like is paying more NI and obtaining fewer dividends, and they don’t like corruption and taking the piss in the way that PPE caused that to happen.

So this B is going to finish this thread and your visit here.

Thread closed.

[BR14]

any chance of moving this to General??

[bobajobjenkins]

Socialism whilst some bits are good is clearly in the air, its main fault is the animosity of "Mondeo man" with the neighbours "Ooh what's he getting? I must have better " coupled with the false " Oh if he has more = i have less" which is the root psychology of these nasty replies. These kind of S.O.A.B's i don't have time for.

For the rest of the good people I've found 3 ways to do it and have another tax specialist consultant on the case, as he said on the phone to me " you employ all these people who pay tax, why shouldn't you do it this way?" He then chose the BMW iX Xdrive electric car at 117k and not the Audi Q7. As the Lord said " help your brother and you will be helped ".

To my brothers on the forum, write off the car after one year but for goodness sake pay the tax. Let's say 45000 in tax for a 117,000 BMW. The company would never chase you for that loss because you own the company , hence the tax consultants " why shouldn't you? You've earned it" followed by choosing the more expensive car. At the same time HMRC is happy because they get the full tax claim on the 100,000 which factors in 1 yes depreciation meaning they get the full 40,000 tax based on its market value, not the cads worth 12p so do I pay 4pence tax? If that was allowed everyone would be doing it.

Just make sure you pay the tax to HMRC based on its market value. The amount that is lost the company would chase up but of course it won't because you make a profit. In this case 1.2million. So you get a brand new 117k car for 40 grand. Who wouldn't?

The advice here is based on 2 accountants both of whom chose the better car in this analogy than the one id chosen and should not be treated as gospel but as is on a forum. Please speak to your own HMRC Tax accountants for exact advice but having said that, that was the advice I was given.

Happy motoring guys.

[BR14]

So really summarised I'm buying a 87k car for 50k. Not bad....

why ask the question then?
just boasting on an anonymous forum.

[NotAllThere]

Envy and Jealousy in the air. ...

Strange.

Anyway, your scheme sounds great. Go for it and let us know how it turns out.

[ladymuck]

Our business is NHS related saving lives. The expansion was quick fast and sudden hence the more modest 95k salary a year. Id be uncomfortable paying myself more. What would you suggest a good salary is in that role?

Ah you're one of Matt Hancock's friends!

[cojak]

Our business is NHS related saving lives. The expansion was quick fast and sudden hence the more modest 95k salary a year. Id be uncomfortable paying myself more. What would you suggest a good salary is in that role?

Well, PPE reseller with a flash car, I guess whatever you can get away with.

[bobajobjenkins]

Our business is NHS related saving lives. The expansion was quick fast and sudden hence the more modest 95k salary a year. Id be uncomfortable paying myself more. What would you suggest a good salary is in that role?

[bobajobjenkins]

The option 2 of course is dividend which is at 50%. Pay yourself a dividend of 180k. Tax off that makes it 90k. Buy the car outright. Probably simplest way.

[bobajobjenkins]

Envy and Jealousy in the air. Aside from genuine posters its clear that's manifested in the reply. To those sincere enough a lease isn't the best thing and outright purchase is the right thing. A 87k phev attracts 2400 BIK according to the accountant which is 200 odd ish a month. The car can be purchased outright factoring in 3 yes depreciation and because it will be sold at a loss (say 50k) the accountant then said there's no tax on earnings not a profit. A car gifted at 50k would attract tax probably 40% rate meaning 20k on the payroll for that bonus come the month its handed to you 3 years later. 3×12=36+5k deposit means on an 87k car - 5k =82. Take 36k off over 3 years = 47k. On tax thats probably 20k for you. 20k+36k = 56k. I havent even factored in the vat reclaim making it 72k purchase really, minus 5k deposit = 67k - 36k = 31k after 3 years. So you probably pay 14k tax on that. 36k+15k = 50 grand car that is 87,000 in the showroom. That kind of car you keep for a long time.

So really summarised I'm buying a 87k car for 50k. Not bad....

[Lance]

Troll.

you might very well think that, but I couldn't possibly comment in the professional forums.

[zonkkk]

Troll.

[northernladuk]

You purportedly run a 3.4m company with 42 staff yet you think it's a smart move to ask a bunch of one man band contractors tax questions that your professionaly trained accountant says is beyond him?

[NotAllThere]

Given the admitted ignorance of some pretty basic BIK tax laws in your post, I'm assuming it's your name that qualifies here.

To summarise the rest of your post - it's almost like the tax laws have been written in such a way so that employers can't gift themselves/their employees cars without paying tax on the benefit. Crazy, eh?

PS. I'd not say £80K is extremely well paid. Well above average, yes. Well paid, yes, but no more.

PPS. As a business owner of a £3.4M turnover company, I'd not say that a £95K salary is doing yourself justice either.

£3.4M turnover, but £1M losses...?