buying a new car through a ltd company

[unwashed potato!]

this isn't something i'm looking to do any time soon but perhaps a year or two in the future, however just wanting to better understand our options now.

i need a vehicle for work us to visit sites, do quotes etc. we've previously used vans but ideally as i'm meeting more and more important customers, i'd prefer to give off a better image.

i also want to get a better car for home use.

i thought to just buy a new vehicle for myself, and then use for work, however really this car would be 90% work use, and 10% personal, so thought to explore buying through the ltd company instead. I do see there are lots of extra taxes but wonder if there is a way we can make the car use as sensible as possible to avoid extra taxes and save.

say for instance, if we purchase out right a brand new vehicle through the ltd co for £15k.

the vehicle would be used for any staff to do quotes/site visits, and stored at possible staff homes over night, though mostly at our office address.

the fuel would be entirely paid for by the company.

does anyone know what tax we've be looking at, any tax relief we might get, and if there's any better way we could purchase a vehicle and use it to avoid higher fees.

 

[gjrc]

IMHO, HMRC has this sewn up any which way you do it.

benefits of buying through the company are you get the VAT back (if registered) not much else.

best way, as far as I can tell, is buy the car then off set any business mileage at circa 40p per mile.

 

[weringo]

benefits of buying through the company are you get the VAT back (if registered) not much else.

Only if 100% business use, which doesn't look to be the case here

 

[Maccapacca]

If it were used by many people and kept at the office overnight you could then claim it’s a pool car and no one pays cc tax. Once you’ve said it’ll be taken home I think someone has to pay cc tax.

Buy a wholly electric car then it’s zero cc tax anyway.

Buy a nice pickup that will be van cc tax fairly minimal

 

[Hyburnate]

If it were used by many people and kept at the office overnight you could then claim it’s a pool car and no one pays cc tax. Once you’ve said it’ll be taken home I think someone has to pay cc tax.

Buy a wholly electric car then it’s zero cc tax anyway.

Buy a nice pickup that will be van cc tax fairly minimal

Macca appears to have quite a bit of experience here.

A pickup truck is classed as commercial so if you have it as a personal vehicle there is limited P11D to pay however, you can only claim 50% back of the VAT.

If you wish to get a vehicle, as long as it's classed as a pool vehicle with limited personal use simply put you're all okay on personal tax for any employee. Your accountant can expand on this as it'll need to be tailored.

However electric cars aren't wholly zero tax, next year (from April forward) it's 1% and then it's looking like it'll rise up 1% each year.

For our engineers, they are allowed to take the van home, no P11D affects as long as it's only used for work purposes. They are allowed to use it for minimal personal use as per HMRCs explanation, however, after this such as using it every weekend they are required to pay tax on both fuel and vehicle duty.

We used to use pick-up trucks but now use EV vehicles.

 

[Maccapacca]

@Hyburnate you sure on the VAT? Pretty sure I’ve claimed full vat back on two pick ups and the discovery ??

 

[Hyburnate]

@Hyburnate you sure on the VAT? Pretty sure I’ve claimed full vat back on two pick ups and the discovery ??

You can usually reclaim the VAT for buying a commercial vehicle (like a van, lorry or tractor) if you only use it for business.

If they’re used only for business, you can also reclaim VAT on:

• motorcycles
• motorhomes and motor caravans
• vans with rear seats (combi vans)
• car-derived vans

https://www.gov.uk/reclaim-vat/cars

 

[Maccapacca]

@Hyburnate ah yes leased only 50% of the VAT. I’ve bought outright every time.

 

[Hyburnate]

@Hyburnate ah yes leased only 50% of the VAT. I’ve bought outright every time.

Makes no real difference, commercial vehicles and VAT is a grey area.

If you're using them for personal use over and above HMRCs definition of 'de minimis' then you should only claim VAT back based on the commercial element. It makes no difference when the input VAT appears, whether monthly or in an outright purchase.

This is why I recommend OP to sought the advice of an accountant, however, my experience is accountants are utterly useless when it comes to tax

 

[VincentHanna]

Pool cars are a nightmare to prove if there's any hint of being parked outside somebody's house for a night or two.

You could save your 15k and lease an electric vehicle instead? 0% BIK at the moment and only 1% from April 2021.

The payments still come off your corporation tax bill and you can still claim 50% VAT back.