Car. Business/personal vehicle hire schemes?

[Fred Bloggs]

Hmm, just reading about Company Cars. It says:



Let's say you had a partner who was NOT a director of your company and they were paid under £8,500 per year as an employee of your company then you could provide them with a company car and no reporting requirements and no tax or NICs to pay?

Of course HMRC would argue that the director had use of the car but what if the partner was the only named driver on the insurance so the director could not legally drive it?

You can't avoid the tax. You are taxed if the car is "available" for you to use. I know this because I tried to argue for not paying company car tax while my car was parked at the airport in the UK and I was overseas five days a week. My claim failed because the car was still "available" even though I was in different country.

[ratewhore]

I leased a car through the business a few years back. When I did the maths, the difference between leasing and buying personally came to about 50 notes a month, without taking into account the fact you can put all the insurance, tax, maintenance etc through the books as well.

When I spoke to my accountant about it, he told me that when you run your own business, the difference is not as great as made out, at least when you would have to withdraw more from the company in order for you to buy the car personally.

One important difference of course is that I didn't own the vehicle at the end of the lease term. But then I didn't want to...

[Wanderer]

Agreed. The consensus here seems to be that company car tax is complicated and having a company car probably isn't tax efficient

Hmm, just reading about Company Cars. It says:

Cars for private use

Private use covers all journeys except:

* journeys forming part of an employee's employment duties (such as journeys between appointments by a service engineer or to external meetings)
* journeys related to an employee's attendance at a temporary workplace

What to report, what to pay

For employees earning at a rate of less than the £8,500 per year, you have:

* no reporting requirements
* no tax or NICs to pay

Let's say you had a partner who was NOT a director of your company and they were paid under £8,500 per year as an employee of your company then you could provide them with a company car and no reporting requirements and no tax or NICs to pay?

Of course HMRC would argue that the director had use of the car but what if the partner was the only named driver on the insurance so the director could not legally drive it?

[Wanderer]

Agreed. The consensus here seems to be that company car tax is complicated and having a company car probably isn't tax efficient

Hmm, just reading about Company Cars. It says:

Cars for private use

Private use covers all journeys except:

* journeys forming part of an employee's employment duties (such as journeys between appointments by a service engineer or to external meetings)
* journeys related to an employee's attendance at a temporary workplace

What to report, what to pay

For employees earning at a rate of less than the £8,500 per year, you have:

* no reporting requirements
* no tax or NICs to pay

Let's say you had a partner who was NOT a director of your company and they were paid under £8,500 per year as an employee of your company then you could provide them with a company car and no reporting requirements and no tax or NICs to pay?

That would most likely mean that the director could not use the car though.

[Wanderer]

Dont buy a car through your company, assuming you are a Limited. Company cars are too expensive.
Buy it as a personal car, claim mileage from your company, now 45p per mile for 2litre and above engine for the first 10,000 miles, 25p per mile thereafter.

Agreed. The consensus here seems to be that company car tax is complicated and having a company car probably isn't tax efficient (unless it's a real greenie one like a Prius or some such crap). A possible exception to this is if it is exclusively used for business and it's a pool vehicle that other employees can use.

I looked into this and it looks like the best thing to do is to operate your own car and claim mileage expenses from your company. There isn't any reference to a 2 litre engine size, I think this is just a flat rate regardless of if you drive a Smart car or a Bentley. I'm sure one of our friendly accountants can confirm this.

[BolshieBastard]

hi guys,

I am looking to buy a car for personal use and thought to ask for your advice. As I am contractor I am thinking what are implications of buying a car on behalf of my ltd company?

Has anyone considered business/personal vehicle hire schemes rather then buying outright? Is there benefits in that?

Thx.

Dont buy a car through your company, assuming you are a Limited. Company cars are too expensive.

Buy it as a personal car, claim mileage from your company, now 45p per mile for 2litre and above engine for the first 10,000 miles, 25p per mile thereafter.

If you are VAT registered and not on the FRS, your co can reclaim the VAT element on fuel too.

[northernladuk]

I think (you need to speak to an accountant) that IF the car you are buying/leasing through the company is very low emissions (CO2) it can be worthwhile now.

You can write off the cost of purchasing the car against tax in a year for example.

That is true, last time I looked in to this was over 2 years ago but I wouldn't be seen dead in any of the cars given as examples of what would benefit me. I expect a couple of budgets later and somethings have changed, hopefully for the better. Still, you are likely to have to choose something to make the benefit work rather than something you actually wanted... unless you want to buy one for SWMBO to run about with the shopping and claim it is yours but that is another issue altogether.

[cojak]

It may be worth posting this in the 'Accounting / Legal' section.

Done.

[DimPrawn]

And has also been asked quite a number of times in the past so try a search first.

From what I remember even if your 'company' vehicle sits on your drive it is available for personal use so incurrs tax based on it not being wholly for business use which didn't make it worthwhile.

I think (you need to speak to an accountant) that IF the car you are buying/leasing through the company is very low emissions (CO2) it can be worthwhile now.

You can write off the cost of purchasing the car against tax in a year for example.

[northernladuk]

It may be worth posting this in the 'Accounting / Legal' section.

And has also been asked quite a number of times in the past so try a search first.

From what I remember even if your 'company' vehicle sits on your drive it is available for personal use so incurrs tax based on it not being wholly for business use which didn't make it worthwhile.

[Old Greg]

hi guys,

I am looking to buy a car for personal use and thought to ask for your advice. As I am contractor I am thinking what are implications of buying a car on behalf of my ltd company?

Has anyone considered business/personal vehicle hire schemes rather then buying outright? Is there benefits in that?

Thx.

It may be worth posting this in the 'Accounting / Legal' section.

[gemasp]

hi guys,

I am looking to buy a car for personal use and thought to ask for your advice. As I am contractor I am thinking what are implications of buying a car on behalf of my ltd company?

Has anyone considered business/personal vehicle hire schemes rather then buying outright? Is there benefits in that?

Thx.