comp car calculator
Hi
I am just trying to decide if its worth my company buying it for the first year, and then me buying it from them after e.g. 12 months.
My thinking is as follows :-
Say list price of car excluding VED and First reg fee £17,102
Value for P11D purposes £17,102
Price of optional accessories £1,000
Capital contributions £0
Amount paid annually for private use of the car £0
Tax Year to 5th April 2004/5 2005/6 2006/7 and 2007/8
Percentage charge 19% 20% 20%
Benefit in kind £3,439 £3,620 £3,620
Tax payable at 22% £757 £796 £796
Tax payable at 40% £1,376 £1,448 £1,448
So, if the comp buys it, it'll cost me gross of 3620 pounds extra (which my company could pay me to cover the cost).
So, in year 1,
the total cost to the company of the car = 17102+ 3620 = £20722
If I then decide to buy the car for , say £11000 1 year from now ( this is typical depreciation on a new car) , the company would need to pay me approx £20000 ( 11 for me and 9 for the tax man) to allow me to buy it
i.e. I would then give the company £11K (to buy the car),
So total cost to the company over 12 months = 20722+20000-11000 =
£29722
I would then own the car.
If the company gives me the cash to buy the car today, for me to get 17K net, the company would need to give me ~32K
So , as long as the depreciation is high for the first year, it would appear that it is better for the company to take the hit on the depreciation , and me buy it after the main depreciation has happened ?
Obviously for the purpose of this exercise, I have ignored the +ve and /or -ve effects which thew company owning the car would have on Corp Tax and also NatIns contributions ,etc. Has anybody got a little Excel spreadsheet where I can input the numbers in (including depreciation ,etc) so as I can try to get an idea ?
Thanks
I am just trying to decide if its worth my company buying it for the first year, and then me buying it from them after e.g. 12 months.
My thinking is as follows :-
Say list price of car excluding VED and First reg fee £17,102
Value for P11D purposes £17,102
Price of optional accessories £1,000
Capital contributions £0
Amount paid annually for private use of the car £0
Tax Year to 5th April 2004/5 2005/6 2006/7 and 2007/8
Percentage charge 19% 20% 20%
Benefit in kind £3,439 £3,620 £3,620
Tax payable at 22% £757 £796 £796
Tax payable at 40% £1,376 £1,448 £1,448
So, if the comp buys it, it'll cost me gross of 3620 pounds extra (which my company could pay me to cover the cost).
So, in year 1,
the total cost to the company of the car = 17102+ 3620 = £20722
If I then decide to buy the car for , say £11000 1 year from now ( this is typical depreciation on a new car) , the company would need to pay me approx £20000 ( 11 for me and 9 for the tax man) to allow me to buy it
i.e. I would then give the company £11K (to buy the car),
So total cost to the company over 12 months = 20722+20000-11000 =
£29722
I would then own the car.
If the company gives me the cash to buy the car today, for me to get 17K net, the company would need to give me ~32K
So , as long as the depreciation is high for the first year, it would appear that it is better for the company to take the hit on the depreciation , and me buy it after the main depreciation has happened ?
Obviously for the purpose of this exercise, I have ignored the +ve and /or -ve effects which thew company owning the car would have on Corp Tax and also NatIns contributions ,etc. Has anybody got a little Excel spreadsheet where I can input the numbers in (including depreciation ,etc) so as I can try to get an idea ?
Thanks
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