I'm a one man ltd co contractor, after some advice regarding the best and legal way to purchase a car and claim business expenses through my Ltd co..
My accountant has advised me that the most tax efficient way is to:
purchase the car privately separate from the business.
Claim 45p per mile through the business from my registered business address (home in my case), to wherever the contact place of work is for first 10,000 miles and 25p thereafter
Create a lease agreement between myself and the Ltd Company, where I transfer a monthly lease amount from the business account to my personal account, so I am effectively leasing the car to the company, but the car remains in my personal ownership, rather than business ownership.
The monthly payment to be made as a dividend/loan account entry for accounting purposes.
Whilst I trust my accountant, I wondered if any other contractors were doing the same?
The mileage part i totally agree with but can anyone confirm about the loan account lease payment?
Is the accounting entry in the div/loan acc classed as a business expenses, therefore should reduce corporation tax?
My accountant has advised me that the most tax efficient way is to:
purchase the car privately separate from the business.
Claim 45p per mile through the business from my registered business address (home in my case), to wherever the contact place of work is for first 10,000 miles and 25p thereafter
Create a lease agreement between myself and the Ltd Company, where I transfer a monthly lease amount from the business account to my personal account, so I am effectively leasing the car to the company, but the car remains in my personal ownership, rather than business ownership.
The monthly payment to be made as a dividend/loan account entry for accounting purposes.
Whilst I trust my accountant, I wondered if any other contractors were doing the same?
The mileage part i totally agree with but can anyone confirm about the loan account lease payment?
Is the accounting entry in the div/loan acc classed as a business expenses, therefore should reduce corporation tax?
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