Reply to: Car Contract Hire

[Hiram King Of Tyre]

I got a nice gas guzzling Nissan Navara van.

[monkeyboy]

I drive a company van

My accountants said that no justification is required as long as you pay the BIK no problem its not up to inland revenue to say whether you need one or not.

I have a merc vito I actually do no business milage at the mo as I take the train but if you claim full fuel alloance you do not have to say how much mileage is business and how much is private. And the current vans are quite nice.

Only one problem is mine in a dual liner ie rear seats doesn't exactly meet the criteria for a van but have removable bulk head if they want to inspect

As far as dvla is concerned it is a van

[css_jay99]

I am in similar situation, trying to see if I should lease.

From all said here looks like leasing via the company is by no means tax effective.

Leasing personally is not worth it either. Looks like its best to Buy a 2/3 yr old car and claim the business mileage, put the profits (mileage allowance - (fuel & maintenance costs)) in a ISA account. That amount in the bank after 3 yrs will probably equate to the depreciation on the car when it comes to resale.

Or better still, Borrow the money on 1yr 0% Transfer, the mileage claim will be more than enough to pay off the loan.

Any logic to my madness ?

css_jay99

[Fred Bloggs]

No, I'd forgotten that! Another nail in the coffin.

My conclusion too. Non-starter.

[Archangel]

Remember there is also Emp NI @ flat rate of 12.8%

No, I'd forgotten that! Another nail in the coffin.

[Cooperinliverp00l]

Thanks all got hold of my accountant. There are some benefits of putting it through LTD co but with current situation and the fact i can't claim VAT back as i'm on FRS scheme she said that i would be better off having it as private and then claiming my 40p / 25p millage. The claim for this alone will pay for the lease each year.

Going to wait until after this weekend as car prices should come down with the arrival of the new plate. might pick myself up a 1/2 year bargain

Thanks for all your valued advice and help.

[Sockpuppet]

The BIK on a Vauxhall Vectra hatchback 1.9CDTi 16v 150PS SRi is:

<snip>

HTH

Remember there is also Emp NI @ flat rate of 12.8%

[Sockpuppet]

3) Van/Pickup truck (but this needs justification)

You have to move IT equipment (laptop)

I might just commute in a lorry.

[Archangel]

looked at a couple of plans something like a 1.9 Diesel Vectra 150bhp SRI doing 30,000 miles pa would cost between £300 and £400 per month either just as the car or fully maintained. Is BIK at a certain % of the monthly cost or is it a standard amount per year ?

The BIK on a Vauxhall Vectra hatchback 1.9CDTi 16v 150PS SRi is:

(2007-2008)

£3842

So for a Lower rate taxpayer the cost is £845 pa (@22% tax)
and for a higher rate taxpayer the cost is £1,537 pa

The fuel charge would be:

£634 / £1,152

(2008-2009)

£4,034

So for a Lower rate taxpayer the cost is £807 pa (@20% tax)
and for a higher rate taxpayer the cost is £1,614 pa

The fuel charge would be:

£710 / £1,420



HTH

[Hiram King Of Tyre]

I think the only real viable options are:

1) Private vehicle

2) Company car under 120g emissions

3) Van/Pickup truck (but this needs justification)

4) Company motorcycle

[Sockpuppet]

looked at a couple of plans something like a 1.9 Diesel Vectra 150bhp SRI doing 30,000 miles pa would cost between £300 and £400 per month either just as the car or fully maintained. Is BIK at a certain % of the monthly cost or is it a standard amount per year ?

Its a % of the purchase price.

Hang on I'll explain.

The benefit is: ((CO2/km -140)/5) + 15(petrol) or + 18(diesel)

This gives you the % of the purchase price that you pay BIK on (max 35%)

You also pay that on the fuel that the car uses. Which is a bit rubbish...not sure why you should pay for mileage that the company makes you do.


Unless you can get something classed as a van its really not worth it.

[Cooperinliverp00l]

If you can do with a Van you pay a BIK in the year of £3000 for the van and £500 for the fuel.

So a basic rate tax payer would pay 20%, NI + 12.8% Emp NI on that so look about say 40% on £3000.

So you could "pay" £1200 ish in tax for the van.

I know I could claim back over £2k on the costs that I am using so I am looking at getting a "van" for use.

Probably looking at a Land Rover Defender as I think the cab versions (i.e. cab but open back) are classed as vans by HMRC.

looked at a couple of plans something like a 1.9 Diesel Vectra 150bhp SRI doing 30,000 miles pa would cost between £300 and £400 per month either just as the car or fully maintained. Is BIK at a certain % of the monthly cost or is it a standard amount per year ?

[Sockpuppet]

If you can do with a Van you pay a BIK in the year of £3000 for the van and £500 for the fuel.

So a basic rate tax payer would pay 20%, NI + 12.8% Emp NI on that so look about say 40% on £3000.

So you could "pay" £1200 ish in tax for the van.

I know I could claim back over £2k on the costs that I am using so I am looking at getting a "van" for use.

Probably looking at a Land Rover Defender as I think the cab versions (i.e. cab but open back) are classed as vans by HMRC.

[Peoplesoft bloke]

I to was of the same opinion until i got my settlement figure for my car which was low due to the millege on it. I do about 25k business miles hence i'm looking at leasing as i would never have to worry about what the thing would be worth due to millege in 3 years time. Only problem is i would need it to be flexible as i know for at least the next 12 months i will be doing another 25k miles business but then it depends on where my contract will be after that.

oh well plenty of searching to be doing

Last time I looked leases were for specified duration and mileage so with the high miles I was doing then, the costs were just as high as buying a motor and taking the depreciation hit.

There are a few sites that trade lease cars so that you can trade to a higher or lower mileage, but it's not cheap or easy. Also, you can get badly stung for "essential repairs" when you hand it back - a bit like landlords ripping off your deposit.

Then there's the tax.

All in all I decided to do without.

That said a mate of mine does it with BMWs all the time - he does 3 years contract hire at a time, but he goes everywhere on the train so keeps his miles down.

[Archangel]

My office is at home!

Most of us are in the same situation, so the car is available for private use, so is a BIK.