Limited Company - Company Cars (Buying/business lease)

[KaHn]

Hey Motors,

Just a bit of advice needed, I have set up my own limited company (to provide consultancy work to a client) and was looking at benefits I could possibley have from the company.

Medical, dental, etc etc.

But what I need help understanding (and before I pay an accountant to tell me the same) is how will the benefit in kind tax work on buying a car for the company or setting up a business lease for a car and just accept it as an overhead.

Cheers for any help,

KaHn

 

[KaHn]

If the company own/lease the car and you use it then you are liable for BIK.

It will be my company who leases/owns the car and I will use it but is there a difference in the amount I will pay for the BIK?

KaHn

 

[KaHn]

Ah ok, so irregardless of if I own the car or not I will still pay the same BIK based on the car I choose.

That makes sense now, cheers.

The dividends side of it I will speak to the accountant about it when I meet him in a week or so.

If anyone else has some more info that would be great.

Cheers,

KaHn

 

[KaHn]

Yes sorry, I am talking about the company owning it not my self. May just look at taking dividends out to pay for the car in full.

Just trying to figure out which is more tax efficient, will bring it up with the accountant

KaHn

 

[KaHn]

Do you have a car currently? If so just use that and claim the mileage. That is the most tax efficient way as you don't have to pay out a large sum to buy/rent a car

Yeah I have a car but I have been looking at new ones anyway (personal) but as I am just moving to a ltd company I thought I would explore other options.

KaHn

 

[KaHn]

You can also claim an enhanced writing down allowance for lower co2 cars.

Practically this means if you want something like a 320d Efficient Dynamics the company route is best but anything more than that and you are better to buy personally and expense at HMRC rates, but its best to sit and do the maths.

Ah ok, so its going to be a lot more complicated than I was thinking

Cheers Fox.

Will have to do some proper research now

KaHn

 

[KaHn]

Thats the plan

KaHn

 

[KaHn]

Cheers for the help

I'm still looking at business leases as the BIK doesn't seem too high and it doesnt have the initial outlay of cash. I can afford to lose the payments from the company each year and look at buying something in a year or two when the company has a large amount of cash in the account.

Thanks again for the help, owe you both a beer

KaHn