Car PCP against Corporation Tax and VAT?

[adamanderson12]

A director of a small company private limited company wants to purchase/hire a car for 2 years.



I appreciate that Business Contract Hire (BCH/Leasing) monthly payments can be offset against profit and losses, and additionally half VAT can be reclaimed (as being used for both personal and business).



However, does the same apply under PCP? It’s a personal contract so I assumed not. The PCP will be for 2 years whereby the director will hand the car back at the end of the term.



Also, under both BCH/Leasing or PCP, can the director still claim travel expenses of 45p a mile (up to 10000 miles etc)?



Thank you

 

[WaveJumper]

We get so many questions on the purchase or running of a company car, there are so many options, ie buying yourself and running it and claiming, company buying etc etc my advice is you need to sit down with your accountant and look at the best method for you personally tax wise as they will understand the whole picture of your finances.

 

[Mark T Jones]

We get so many questions on the purchase or running of a company car, there are so many options, ie buying yourself and running it and claiming, company buying etc etc my advice is you need to sit down with your accountant and look at the best method for you personally tax wise as they will understand the whole picture of your finances.

This

However, direct answer - as you've said, PCP won't be in the name of the company, so isn't allowable.

 

[MyAccountantOnline]

...

Also, under both BCH/Leasing or PCP, can the director still claim travel expenses of 45p a mile (up to 10000 miles etc)?



Thank you

If the company is leasing and funding the car - no.

The HMRC approved mileage rate is to reimburse an employee when they use their own car for company business trips.

 

[MyAccountantOnline]

When you consider a company car do make sure you take into account the potential Benefit in kind tax charge. It's explained here https://www.gov.uk/expenses-and-benefits-company-cars