Car Lease, Can I claim back VAT?

[StuartMcNicholas]

Hi there,

I'm a director of my own limited company in which I employ myself as a contractor.

I currently claim mileage back on my car which is privately owned.

I plan to employ my wife as my accountant in the next 2 months (basic book keeping and sales ledger etc).

I'm also in the final stages of setting up a 24 month car lease for my wife to use.

Can I claim back the VAT on the monthly payments for this extra vehicle?

Thanks

[TheCyclingProgrammer]

It really isn't hard to Google some of this stuff.

VAT reclaim is 50%: https://www.gov.uk/reclaim-vat/cars

Have you considered the personal tax (BIK) implications of providing a company car?

[AMH]

if your flat rate, then no, as a lease is not classed as an asset.

[stek]

This is either the worst sockie we've had for ages or the thickest poster we've had for ages....

[barrydidit]

Hi there,

I'm a director of my own limited company in which I employ myself as a contractor.

I currently claim mileage back on my car which is privately owned.

I plan to employ my wife as my accountant in the next 2 months (basic book keeping and sales ledger etc).

I'm also in the final stages of setting up a 24 month car lease for my wife to use.

Can I claim back the VAT on the monthly payments for this extra vehicle?

Thanks

Why don't you ask your acco...oh.

[malvolio]

Hi there,

Yo...

I'm a director of my own limited company in which I employ myself as a contractor.

No, you don't. You are an officer and shareholder of YourCo, not an employee.

I currently claim mileage back on my car which is privately owned.

Fair enough for business miles only of course...

I plan to employ my wife as my accountant in the next 2 months (basic book keeping and sales ledger etc).

OK, not a problem, I trust you won't be taking advantage of her and making her do too many hours.

I'm also in the final stages of setting up a 24 month car lease for my wife to use.

Does her level of work justify the equivalent salary that this represents? Does she need a car for business use? Have you considered the personal tax implications that this BIK represents? Have you ever heard of the Ramsay principle?

Can I claim back the VAT on the monthly payments for this extra vehicle?

IF you're on FRS, no otherwise yes.

Thanks

You're welcome.

But perhaps get your own car rather than cheating the tax system to pay for it, eh?

[Alan @ BroomeAffinity]

Car Lease, Can I claim back VAT?

A company car is rarely tax efficient. If the car is provided to your wife, as your wife, then you'd be taxed on the BIK. If its provided to your wife, as an employee, then she'd be taxed on it, unless her income (incl the BiK) is less than £8.5k. But, for this to be allowable, then it needs to be a justifiable business expense. Is the whole package (salary, car etc) market rate? I doubt it tbh. Or to put it differently, would you offer the same package to somebody who wasn't your wife? I doubt that too.

The Ramsay Principle would come into play here. Which is to say that if arrangements are made solely to save tax, rather than for genuine commercial benefit, then the whole arrangement should be taxed.

There are better ways to save tax - one of which might be to engage an accountant as your accountant, not your wife.

[BolshieBastard]

Hi there,

I'm a director of my own limited company in which I employ myself as a contractor.

I currently claim mileage back on my car which is privately owned.

I plan to employ my wife as my accountant in the next 2 months (basic book keeping and sales ledger etc).

I'm also in the final stages of setting up a 24 month car lease for my wife to use.

Can I claim back the VAT on the monthly payments for this extra vehicle?

Thanks

Ah bless! Dont you just love these noobies who've heard all these stories you can put everything through your limited co and get the taxman to pay for your wife's new car, weekends away in posh hotels with her to talk 'business strategy' etc, etc?

[GlenW]

Ah bless! Dont you just love these noobies who've heard all these stories you can put everything through your limited co and get the taxman to pay for your wife's new car, weekends away in posh hotels with her to talk 'business strategy' etc, etc?

You mean I shouldn't be doing those things?
Shame.

[Batcher]

Yo...


No, you don't. You are an officer and shareholder of YourCo, not an employee.

Agree with most of your post but surely if he is paid a salary from HisCo then he is an employee?