Company cars - which accountant is right?

[blacjac]

I have asked a my company's accountant and a friend who works for a medium sized accountancy firm that specialises in small businesses (not contractors).

One has told me that you should never put a car through as a company car as a business owner (even an old car) as you will be hammered for NI. Much better to keep it as personal and claim mileage. Or company pays for all petrol if you do a lot of miles per year.

The other has said there can be times when it makes sense to put through a car as a company car, especially when it is an old car.


Which advice is correct?

[ASB]

I have asked a my company's accountant and a friend who works for a medium sized accountancy firm that specialises in small businesses (not contractors).

One has told me that you should never put a car through as a company car as a business owner (even an old car) as you will be hammered for NI. Much better to keep it as personal and claim mileage. Or company pays for all petrol if you do a lot of miles per year.

The other has said there can be times when it makes sense to put through a car as a company car, especially when it is an old car.


Which advice is correct?

Boh probably depending upon the context they answered the question in

You really need to run each individual proposed vehicle through the BIK calculators, generally older cars used to hammer you disproportionately becues the BIK was based on the list price when new. This may have changed a bit with the move to co2 based biks.

[Fred Bloggs]

I looked at running a QALEC car (qualifying low emissions car) through the Ltd Co, but decided the hair shirt wasn't comfy enough for me!

[BolshieBastard]

My account advises me never to have a 'company' car due to taxation issues. So I dont.

Reckon its only a reasonable choice if its something like a fiat panda type but who wants one of them?

[Pickle2]

running a really old car, like a classic car through the books is a winner. As pointed out, you pay BIK on the list price, so if the car sold 30 years ago for 800 quid new, you pay next to nowt. The car has to be worth < 12k though i believe.

Search on here, i looked into it a couple of years ago and posted the finding on here.

[blacjac]

Thanks guys, what about the putting petrol through the company?

The example I gave both accountants was 20k miles a year, of which around 4k would be business...

Will probably do what my accountant says (that's what I pay them for after all), but would like to find out what other people's accountant's have recomended.

[johnhol]

Told to pay myself 0.40p a mile expenses by my accountant.

Makes up a nice little sum at the month end...

[ASB]

Thanks guys, what about the putting petrol through the company?

The example I gave both accountants was 20k miles a year, of which around 4k would be business...

Will probably do what my accountant says (that's what I pay them for after all), but would like to find out what other people's accountant's have recomended.

There are basically 2 ways of dealing with petrol. Either company reimburses you for business petrol or company pays all petrol. In the latter case there is a standard tax chare (bik) and also a vat scale scharge to compensate for the vat loss to the treasury - though I guess this point becomes moot on the FRS (but I was never on it so can't be sure).

http://www.hmrc.gov.uk/guidance/480_chapter13.pdf

It can be quite high, the example given shows 4056 as the bik resulting in a tax bill of either 1600 or 1000 quid give or take change. But if you are doing 16k private miles a year it might be worth while.

Of course I forgot to mention class 1a NIC so that's a 13 odd % charge on the company too.

[blacjac]

Hmm thanks ASB.


What puzzles me is that the accountant that advises against a company car is the one that advises to put personal petrol through.......


I do trust my accountant and I will follow their advice.

I just wish I understood why I'm better off.
Suppose it comes from my programming roots, allways need to understand the rules in order to impliment them .

[MPwannadecentincome]

why[/B] I'm better off.
Suppose it comes from my programming roots, allways need to understand the rules in order to impliment them .

I wish more people understood why in all sorts of matters - we might not be in this b****y credit crisis then!