Reducing list price company car via interest free Employer loan

[bobspud]

Hi,
you need to really understand what you are getting into. A second hand company car still holds the tax value of its original book price + the factory extras. This figure is then used to calculate its taxable value based on Co2. If you go this route you can no longer claim 40p / 25p for mileage. (I think 10p is the max mileage rate for a company car owner or anyone that shows car allowance on their pay slip).

You might find that you earn more cash booking 20k miles a year

[tim123]

Just reading this and wondered what people thought - if you had a company car for say £7000, this could then make the Company Car Benefit very minimal

If the car is held in the company it may be worth considering the employee contributing to the cost of the car. Contributions of up to £5,000 reduce the list price on which the taxable benefit is paid. If the employee has put some of his or her own money into the car, it will be cut in direct proportion to the amount invested. It is worth noting that a company can lend an employee up to £5,000 interest free without a benefit in kind being taxable on them.

Also saw this,

You have to crunch the numbers in every situation but generally you are better holding the car outside of your company, unless it is a very low emissions car which qualifies for a 100% capital allowance for the company.

Why would a 100% capital allowance be so benificial? Any ideas what cars qualify?

Because by writing off the whole amount of say 12K, instead of the normal 3K in year 1, you save CT at 20% on 9k, so are 1800 better off.

But, of course that's only in year 1. In year 2 you get to write off 0 instead of 2250 so are 450 worse off in that year, ditto year 3, 4 .......

tim

[stphnstevey]

Just reading this and wondered what people thought - if you had a company car for say £7000, this could then make the Company Car Benefit very minimal

If the car is held in the company it may be worth considering the employee contributing to the cost of the car. Contributions of up to £5,000 reduce the list price on which the taxable benefit is paid. If the employee has put some of his or her own money into the car, it will be cut in direct proportion to the amount invested. It is worth noting that a company can lend an employee up to £5,000 interest free without a benefit in kind being taxable on them.

Also saw this,

You have to crunch the numbers in every situation but generally you are better holding the car outside of your company, unless it is a very low emissions car which qualifies for a 100% capital allowance for the company.

Why would a 100% capital allowance be so benificial? Any ideas what cars qualify?

Thanks