Is this an exceptional deal ?

[Red C220]

https://www.gov.uk/government/publi...ess-cars/capital-allowances-for-business-cars

Seems that the 100% First Year Allowance for cars emitting under 50 g/km only comes in next year (6 April 2018)? At current the limit is more generous and stands at 75 g/km. Interesting.

No allowances for 4.0 twin turbo V8's then.

I guess I'll keep them out of the business

 

[Deleted member 37751]

https://www.gov.uk/government/publi...ess-cars/capital-allowances-for-business-cars

Seems that the 100% First Year Allowance for cars emitting under 50 g/km only comes in next year (6 April 2018)? At current the limit is more generous and stands at 75 g/km. Interesting.

Because it's the middle of the night and I don't have my FD at the side of me, can someone simplify this for a dummy like me using a £100k Tesla as an example for nice round figures?

If my company bought it outright instead of lease, how much would that reduce my CT bill by in £?

 

[markjay]

Because it's the middle of the night and I don't have my FD at the side of me, can someone simplify this for a dummy like me using a £100k Tesla as an example for nice round figures?

If my company bought it outright instead of lease, how much would that reduce my CT bill by in £?

20%, but it will cost you 10% in VAT, and you'll pay BIK. I think....

 

[Red C220]

CT is now 19%.

 

[wivenhoe]

Because it's the middle of the night and I don't have my FD at the side of me, can someone simplify this for a dummy like me using a £100k Tesla as an example for nice round figures?

If my company bought it outright instead of lease, how much would that reduce my CT bill by in £?

You will need to make sure this is still correct in the 2017 / 18 tax year. My understanding is £ 100k x 20% = £ 20k saving on CT

Personal tax = £ 100k x 7% x say 40% = £ 2,800. Bound to increase yearly but should see over £ 10k saving in 3 years.

However, 2 things to consider - the annual running costs are also offset against CT and so the £ 2.8k personal tax should be looked at in that light - servicing & insurance could be £ 1,500 / year on a £ 100k car. As I understand it, if the company sells the car then the proceeds are treated as income and so you'll pay CT on it. If you px the car then next time you'll only save the CT on the cost to change.

Just to confuse matters a little further - I believe that on a Tesla the company can offset 100% of the lease cost

 

[markjay]

You will need to make sure this is still correct in the 2017 / 18 tax year. My understanding is £ 100k x 20% = £ 20k saving on CT...

The £100,000 Tesla actually costs £83,333+VAT, so the CT relief will be £83,333 x 19% = £15,833.

And if you do need to pay 50% of the VAT, then this will reduce the actual 'tax saving' to £15,833 - (£16,667/2) = £7,499.

It's not clear though if you can get tax relief against the VAT amount that you can't claim back....

The further 'saving' is of course in not having to pay 45% tax on Dividends. But this will be offest to some extent by the BIK.