Car Lease cost or P11 value

[The Badger 22]

So apologies if this has been covered previously I have searched.
Our business consists of 2 partners on a 50/50 holding.
One has a company car the other a van the lease costs are broadly similar. When considering the remuneration packages should the lease cost or the P11 value be used?.

 

[DWS]

For the car it will be the list price X the relevant %, for the van there is a set annual charge and then there is also fuel on private use to consider.

 

[The Badger 22]

For the car it will be the list price X the relevant %, for the van there is a set annual charge and then there is also fuel on private use to consider.

Hi DWS thanks for the reply I probably should have explained a bit more the dilemma.

The two stakeholders involved should be compensated on a 50/50 basis and now one is claiming the other is taking more out as he has a car which attracts a higher BIK. My thoughts are the lease costs are pretty much the same so they are equal. Happy to get other perspectives

 

[Bobbo]

Does your comparison of lease costs take into account the 50% input VAT restriction on leased cars?

Higher BIK will mean a higher amount of Class 1A NIC, so if the intention is that total cost of remunerating each director is equal then this should be factored in.

 

[UK Contractor Accountant]

The two stakeholders involved should be compensated on a 50/50 basis and now one is claiming the other is taking more out as he has a car which attracts a higher BIK.

the higher BIK is irrelevant as that relates to personal tax issues.

if they both have vehicles costing the same amount each month in rentals then they are equally remunerated.