Hi folks, I just wanted your opinion on something.
I have started a new business as a ltd company. I was just wondering if anyone finances their vehicle through their business?
If so, my question is this; can the monthly cost be deducted as a business expense before tax?

It is not VAT registered so I believe this is not an allowable deduction, and I know that I would personally be liable for a benefit in kind tax payment.

Many thanks

Yes and no.

It depends how many miles a year you do. If its quite high you are better off buying it personally and charging the company mileage - you need a good accountant to advise as each case is different. 2021 L405 Vogue SE 4.4 V8 DIESEL ~ #17

I will have to chat to him, but I probably only do 5000 business miles at the most per annum.
I was hoping to put the cost of a new vehicle through the company as a way of reducing personal expenses so I didn't have to take any monies out of the company and incur more tax?????

Not worth it - you personal tax liability for being supplied with a RR (benefit in kind, due taxed under PAYE, tax payable at your top rate of tax on a large % of the list price of the vehicle due to high C02 emissions) would significantly outweigh any benefit re. Cost deduction to save corp tax in the company 2007 Zermatt Silver TDV8 Vogue SE - now sold but was a great car!

I own mine & charge the company, mind you I can only charge 45p mile & it costs me over £1 per mile

GraemeC wrote:

Not worth it - you personal tax liability for being supplied with a RR (benefit in kind, due taxed under PAYE, tax payable at your top rate of tax on a large % of the list price of the vehicle due to high C02 emissions) would significantly outweigh any benefit re. Cost deduction to save corp tax in the company

+1 4.4 TDV8 Vogue Baltic Blue MY11

Rotorboater wrote:

I own mine & charge the company, mind you I can only charge 45p mile & it costs me over £1 per mile

Thanks for your responses guys I really appreciate it.
Would it make much difference if I were to get a new RRS or discovery, with it being much less on the list price, or something like an evoque with a smaller list price and co2 emissions??

I use my own rr for business, and claim business miles from company which is £0.45 up to 10k miles then £0.25 thereafter

As a general rule, it's not tax efficient to run a company car (there may be some weird case where this is not true, but as your're on a RR forum we'll assume you don't want to drive an electric eco-box....)

you are better off using your personal vehicle and claiming for mileage.

Big companies still offer compay cars, it enables them to attract employees (a perk, status symbol, call it what you will) and in some cases it helps mitigate potential liability

eg. Would it be reasonable to ask someone to do 50k miles a year as a travelling salesman, but require them to use their own vehicle? The company has a responsibility for ensuring its employees are safe when at work - it's sensible to run a leased fleet as you know the vehicles are relatively new, correctly insured, serviced etc. 2007 Zermatt Silver TDV8 Vogue SE - now sold but was a great car!

Is the 45p per mile payment tax free?

Yes the 45p and subsequent 25p rates are tax free.

As pointed out in another post you can charge what you like but will have a tax liability on the difference. (That is what I do as you'll note that with current fuel prices the per mile cost of FFRR is around 23-26p per mile so you have no contribution to maintenance after 4000 miles). Even paying the tax on the difference is better that the benefit in kind tax of a company car. 2019 D5 HSE Lux SDV6 Indus
55 D3 SE
98 MX5 1.8 RS
gone 17 older variants of FFRR

Thanks for the replays, I really appreciate it.
I am wanting to keep my full fat but want to upgrade my mrs c class. We are both directors of our company and I was thinking of going down the company car route to minimise our personal expenses and put as much through the company as possible. Is it still much cheaper overall to have a personal car and charge mileage to the company, even if I was to get something like the efficient dynamics BMW (apologies I know we are on the ffrr forum). Another of the main reasons is the amount of customer deposit/ advance rental required to it down when leasing a new car personally vs business. Business advance rental can be £5k less than a personal lease, this saving could be used to pay the £1250 per year personal tax liability and re-invest in our young company.
Sorry for the long message.

How did you calculate £1250 per year? I'd expect it to be way more than that....? Graham

____
Gone: 10MY L320 RR Sport HSE, Ipanema Sand
Gone: 20MY Jaguar iPace HSE, Silicon Silver
Gone: 17MY RR Evoque SE Tech, Loire Blue
Gone: 08MY Discovery 3 XS, Stornoway Grey
Gone: 07MY FFRR TDV8 Vogue, Stornoway Grey

If you go down the leasing route its wasted money anyway as the company would pay out for something it doesnt own.

TBH your best taking the bullet and owning the car outright. Im sure if the finances are done right for 10,000 miles a year at 45p/mile and then some over that you will be quids in more than doing it all through the company.

Plus in the current climate if the company has to fold the car is an asset of the company and not yours...

To me its a no brainer, both cars can put in 10,000 miles a year at least and claim back £4500 that certainly would cover monthly payments for a car and insurance for something semi decent if you pay monthly payments and dont waste money on a lease.

Just my thoughts mind but that pays for a good bit of RR every year and fair enough would just about cover normal fuelling and so forth but the company giving a car is as above, the worst option unless you get a van and ONLY do company miles using a fuel card in my own experience of having company vehicles. FFRR MY06 facelift With TDV8 Alloys Zeros/ATR's
Mantec Sump Guard, Rigid Load liner, MY10 BT upgrade.