Leasing

[flowrider]

I would expect that although the list price of a car is say £40k the price the dealer pays is a lot less therefore a £12k depreciation is not actually a £12k loss to the dealer.

 

[chrisbin]

..

 

[k187]

Regarding this BIK tax, approx. 2.5k on a Ghibli. Can this be claimed from a VAT claim on the lease, therefore rendering this saving largely non beneficial?

Lack of sleep is contributing to me not understand what you mean :/

The company can claim back half the VAT on the lease payments.

You have to pay the calculated BIK times your current tax rate. This is an income tax thing and nothing to do with the company.

 

[chriscls]

Lack of sleep is contributing to me not understand what you mean :/

The company can claim back half the VAT on the lease payments.

You have to pay the calculated BIK times your current tax rate. This is an income tax thing and nothing to do with the company.

I'll not be taking a salary

 

[k187]

I would expect that although the list price of a car is say £40k the price the dealer pays is a lot less therefore a £12k depreciation is not actually a £12k loss to the dealer.

Yeah my original argument with the dealer was if you discount the car by 1k then recalculate the finance I only actually get a equivalent discount of about half that, because I'm only really funding about 45% of the car (over 3 years). The situation is worse with a shorter lease.

The problem is MB FS 'buy' the car at the discounted value I negotiate with them and then lease it to me. The dealer doesn't get the car back after 3 years, it goes into the MB network. So a 1k discount is a 1k loss for them, but only about a £450 gain for me.

If on the other hand they use another financial institution to fund the lease and get the car back at the end then they don't actually take that whole 1k hit, unless they also sell the car cheaper after the lease.

This is partly the reason main dealers leases are not so great, and they usually don't want to negotiate the values too much. This is contract hire I'm talking about btw.

Regardless of all that it's still possible a dealer is willing to take a massive hit for other reasons, like clearing their forecourt, hitting a target or as a loss leader on another sale.

 

[k187]

I'll not be taking a salary

Ok, and any dividend?

Do this. Calculate the BIK price of your car. It'll be something like 14/15% of its retail price. Let's call this X

Now figure out in the tax year how much salary + dividends you will be taking out of the company. Based on this total find your tax rate:

Less than 10k = 0%
Less than £31,866 =20%
Less than 150k = 40 %
More than 150k = 45%

Now the tax you'll pay on your car as BIK is this percentage times X

You need to do this every year as your salary or dividends amount may change. Remember salary + dividends = income.

 

[smillion]

My gut feeling, and with over 25 years as an accountant in practice, a Ghibli would not make an ideal "company car" , where it's your company and you have the choice as to how you get distribute profits.

But as ever, it depends.......

Having researched the Ghibli personally, and spoken with dealers, there is still some doubt about their likely residual values at the end of three years, and at the moment estimates range between 39% and 42%. The depreciation of the car plus profit will be charged by the lease company.

This is based on the basic list price.

And as I understand, it regardless of the options you add ( which can be material) the residual changes little from the calculation based on the basic car.

Lease companies do seem to be able to command 10% discount from Maserati, based on volume, and I recommend you take a look at sky fleet leasing.

I like to buy cars however there a no doubt that leasing has become more and more popular amongst clients. Risk and rewards, balanced with the generous efforts of some manufacturers to get their product out there, including Merc. This reduces the base cost to the leasing company and they are able to pass those savings on.

Just budget that you will be taxed heavily (personally) on a car like this. You are very unlikely to be able to treat this car as a pool car and avoid the BIK, as it will be available for private use. There is plenty of case precedents. But as ever, it depends on your circumstances and if they are extraordinary then so be it....

The company can only get 50% of the VAT back on the lease payments.

A cracking car, which if residual values come true will be great value in three years

Just crunch the numbers for a personal lease, taking the additional funds from the company by way of dividends , or drawings from a director current account of in credit of course....

And then see the difference.

 

[k187]

I had the same debate generally before going the contract hire route. It only works for me because I'm already on the edge of the 40% tax band for at least the entire lease term. Paying BIK and handing the car back works out a lot less than taking out the money and buying it - both for me and the company.

At a basic taxpayer rate I'm not sure it makes sense, especially if you're not doing it to change cars every x years or some motivation like that.

 

[chriscls]

Smillion, sky fleet are very expensive for their Ghiblis. At least £100+ on average.

 

[smillion]

Smillion, sky fleet are very expensive for their Ghiblis. At least £100+ on average.

Last month a 10,000 mile contract was at £659 including VAT, based on a personal contract and I see that has now materially changed. Just shows how the available incentives and deals can make a material difference.

It also reflects how nervous they are about residuals perhaps.

If you keep an eye on the sly fleet website you'll see that there are always deals which look to be very generous, including Mercs.

For example an ML250 for £395 plus VAT, instead of £521 ....

 

[chriscls]

Last month a 10,000 mile contract was at £659 including VAT, based on a personal contract and I see that has now materially changed. Just shows how the available incentives and deals can make a material difference.

It also reflects how nervous they are about residuals perhaps.

If you keep an eye on the sly fleet website you'll see that there are always deals which look to be very generous, including Mercs.

For example an ML250 for £395 plus VAT, instead of £521 ....

Wee red blob inside me set on a Mas going for test drive tomorrow, but need it to sound like a Mas, even as a diesel.

 

[smillion]

By the way, I've been down the older QP route, and whilst a stunning car do budget for the possibility of serious repair bills. Mine never broke down, but the first vist to **** Lovett was £4500. Then an A/C unit at £3500 including labour. Just prepare for the worst.....

Amazing cars though and no regrets.......

 

[smillion]

Wee red blob inside me set on a Mas going for test drive tomorrow, but need it to sound like a Mas, even as a diesel.

Oh it does, believe me it does. Amazing technology in that exhaust ......

 

[chriscls]

By the way, I've been down the older QP route, and whilst a stunning car do budget for the possibility of serious repair bills. Mine never broke down, but the first vist to **** Lovett was £4500. Then an A/C unit at £3500 including labour. Just prepare for the worst.....

Amazing cars though and no regrets.......

Primary reason why I decided to go for the lease option. Prefer to get servicing included That said would you know of any exclusions to these ?

 

[smillion]

Primary reason why I decided to go for the lease option. Prefer to get servicing included That said would you know of any exclusions to these ?

I think as long as you are within a manufacturers warranty you'll be fine .....

 

[chriscls]

Tested the Glhibli diesel today, I must say the sound on youtube, does it no justice. In person it is unreal, artificial or not.

Ride and handling is immense, I was in the car a minute and glanced at the clock, I was doing 95MPH. So easy and comfortable to drive.

Regarding BIK and income. Does the income account for all jobs? as I would be running the business in my spare time (weekends)? How is BIK paid? can I reclaim 1/2 VAT then pay or?

 

[markjay]

Edit

 

[flowrider]

Tested the Glhibli diesel today, I must say the sound on youtube, does it no justice. In person it is unreal, artificial or not.

Ride and handling is immense, I was in the car a minute and glanced at the clock, I was doing 95MPH. So easy and comfortable to drive.

Regarding BIK and income. Does the income account for all jobs? as I would be running the business in my spare time (weekends)? How is BIK paid? can I reclaim 1/2 VAT then pay or?

You might be better putting these questions to your local tax office, at least then you will know exactly where you stand.

 

[smillion]

Tested the Glhibli diesel today, I must say the sound on youtube, does it no justice. In person it is unreal, artificial or not.

Ride and handling is immense, I was in the car a minute and glanced at the clock, I was doing 95MPH. So easy and comfortable to drive.

Regarding BIK and income. Does the income account for all jobs? as I would be running the business in my spare time (weekends)? How is BIK paid? can I reclaim 1/2 VAT then pay or?

See here

Comcar Maserati Ghibli 3.0 V6 Diesel 275hp Auto - Company car tax calculator

The value of the benefit counts as income for your personal tax. And so if this is at 40% you should budget for paying £500 per month in income tax, assuming no fuel is paid by the company on your behalf, otherwise you need to factor in the fuel benefit as well.

 

[chriscls]

strongly considering a personal lease (PCH). The thing is I never lease or rent anything always buy outright.

I live with parents at large home and only started new job 5 months ago, so a credit check is giving me concerns. Does anyone know how stringent this check is ? Is it on par with mortgage in terms of strictness.

I would be paying up to £900 PCM and an initial payment of £4,000