100% tax relief on new cars - an update

[marc777]

Many of you with your own businesses will know that it is possible to get 100% tax relief on the purchase of a new car, even if bought on HP.

http://www.comcar.co.uk/adv_120results.cfm?OType=Make,Model

The list has never been awe inspiring as it is based on low emmission cars, but I thought I would post an updated link to the car list as it is getting more interesting - particularly for those who want to fund a tax efficient company car for your spouse or son/daughter through the business.

Food for thought.

Hint - you can sort the list according to make and Model.

By the way, no Mercs in the list but some Smarts


Marc

 

[jeremytaylor]

Interesting to see that, despite all the hype surrounding the Toyota Prius and its low emissions, it only produces 11% less CO2 than a similar-sized (and much cheaper and much less complex Renault Megane). Makes you wonder why they bother!

 

[janner]

My accountant says to keep cars well away from the business. Dunno why?
Simpler just to claim business miles on your own car he reckons.

 

[marc777]

Not for those in this list.

100% tax relief and the lowest benefit in kind you'll see.

Ask him to reconsider because he might be wrong as far as these cars are concerned.

They are especially cracking value for those, like spouse or children, who do little or no business mileage..........

e.g Audi A2 1.4 tdi (nice) car

Cost £15,000 - company tax bill falls by £2,850 in year of purchase (being the 19% company tax rate on the £15,000 cost).

Company pays all bills (insurance, servicing, road tax, HP repayments but NOT fuel) and gets tax relief.

The user is charged tax for the benefit (£448 per annum = £37 per month for new company car on the drive) - but don't forget there are no running costs to settle apart from fuel (and if you do business mileage then charge 12p per mile to the company)- The main running costs come out of the company, not out of taxed income.

For some this is not a bad deal

 

[Rory]

The family member would have to be working in the business (and being paid a salary of over £8000 or so) though, wouldn't they?

 

[Evolution]

(and if you do business mileage then charge 12p per mile to the company)- The main running costs come out of the company, not out of taxed income.

For some this is not a bad deal

Hi this is my 1st post, I've recently got my company to get me my car (due next week). I also agree with all the points in your post, i.e company pays for the servicing, insurance, etc.

I was told, by my accountant, that it is OK to have company cars as long as you don;t have the company pay your fuel, this is where the individual will be charged heavily on PAYE. My plan is to claim company mileage via expenses, he told me that I can claim 9p per business mile.

My car is also contract hired so I can claim half the VAT back on the monthly payments.

 

[janner]

he told me that I can claim 9p per business mile.

I claim 40p/mile

 

[blicky_1]

9 ppm?? I think they are having a laugh

I claim 50ppm! dont forget you can only claim this for 10000mls per annum then you have to go to the lower rate (25ppm for me)

 

[Evolution]

I currently claim 40ppm for using my own car of which you can claim VAT on 12ppm but you can't claim this amount on a company provided vehicle.

 

[marc777]

When its a comapny car its 12p per mile for fuel only. To avoid the PAYE benefit in kind.

Otherwise if you own your car and charge the company its 40p per mile for first 10000 miles and 25p per mile therafter.

Simple really

 

[High-Lo]

When its a comapny car its 12p per mile for fuel only. To avoid the PAYE benefit in kind.

Otherwise if you own your car and charge the company its 40p per mile for first 10000 miles and 25p per mile therafter.

Simple really

Thanks for that link Marc. I am seriously considering purchasing a Smart Brabus Roadster thru my company this way. My accountant isn't keen on company cars though (don't know why).

 

[Ashley]

I get 45p per mile then drops down to something I can remember.

Although I do not consider it a real benefit as I own the company so all it is doing is reducing my tax liability (12k company tax last year really sickens me ) I would prefer a better tax system.

 

[Evolution]

If you mean corporation tax, I thought I was bad at having to fork out 3k!

What does it mean to reduce the tax liability, does that mean I pay less tax cause the company owns a vehicel.

 

[Ashley]

Thanks for that link Marc. I am seriously considering purchasing a Smart Brabus Roadster thru my company this way. My accountant isn't keen on company cars though (don't know why).

I do not put any assets in to my company; I may as well be a sole trader if the company is asset rich. I also have a holding company and trading company that way if the trading company goes belly up my holding company (which holds all the assets is safe). But one of the considerations is that my holding company own the freehold’s etc and all capital equipment and lease them to the trading company. But does not have any currency commitments so can not go into the red. Also any personal guarantees are sighed by my mother and wife whom own no assets and as such my farther and I whom own the company shares can not be called upon to settle company finances.

 

[Ashley]

If you mean corporation tax, I thought I was bad at having to fork out 3k!

What does it mean to reduce the tax liability, does that mean I pay less tax cause the company owns a vehicel.

corporation/company tax same thing.

No I own the cars and and I get a fuel allowance.

e.g.

20k tax - petrol 8k petrol allowances = 12k payable.

I also entertain a lot (worth a few quid).

 

[marc777]

I do not put any assets in to my company; I may as well be a sole trader if the company is asset rich.

Missing the point i'm afraid. Whatever your motives for keeping "assets" in a safe haven, some company cars are entitled to 100% tax relief and thats that.

Sole trader pays up to 40% tax plus 8% Class 4 National Insurance - whatever your assets

Company 19% corporation tax.

 

[Ashley]

Missing the point i'm afraid. Whatever your motives for keeping "assets" in a safe haven, some company cars are entitled to 100% tax relief and thats that.

Sole trader pays up to 40% tax plus 8% Class 4 National Insurance - whatever your assets

Company 19% corporation tax.

OT sorry.

I know how tax works, that is why my weekly wage is only £90 and any other income is dividends. My point is that having assets within a ltd company does not offer any protection if you should decide to fold the company.

And let’s not forget that we live in a country where the Vat will happily stick you with large VAT payable after an audit. 10 year old small company say paying 10k a ¼ VAT can easily get a 40k VAT bill plus surcharges after 10 years, is it not better at this point to be able to windup the company.