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Car. Business/personal vehicle hire schemes?

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    Car. Business/personal vehicle hire schemes?

    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.

    #2
    Originally posted by gemasp View Post
    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.

    Comment


      #3
      Originally posted by Old Greg View Post
      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.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Originally posted by northernladuk View Post
        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.

        Comment


          #5
          Originally posted by Old Greg View Post
          It may be worth posting this in the 'Accounting / Legal' section.
          Done.
          "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
          - Voltaire/Benjamin Franklin/Anne Frank...

          Comment


            #6
            Originally posted by DimPrawn View Post
            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.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Originally posted by gemasp View Post
              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.
              I couldn't give two fornicators! Yes, really!

              Comment


                #8
                Originally posted by BolshieBastard View Post
                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.
                Free advice and opinions - refunds are available if you are not 100% satisfied.

                Comment


                  #9
                  Originally posted by Wanderer View Post
                  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.
                  Free advice and opinions - refunds are available if you are not 100% satisfied.

                  Comment


                    #10
                    Originally posted by Wanderer View Post
                    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?
                    Free advice and opinions - refunds are available if you are not 100% satisfied.

                    Comment

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