Company car or not?

[johnsmith]

hi guys, need some advice

struggling to make a decision.

Ltd company which is running fairly well. not VAT registered.
currently use my own car for bus. trips. doing around 10,000 miles for bus. and 2000 for personal use. i take 40 p /mile for the bus. miles.
i'm a lower tax payer.

now I'm looking to buy a new car.
List price 17500
CO2 - <110
mileage would remain the same 10k bus. and 2k personal.

now my question is whether to buy the car through the bus. as a company car or buy it persnally and use the 40p to calculate bus. miles.

any suggestions really appreciated.

 

[Geoff T]

I'm no bean counter, but having just done the same exercise on my mileage, I'd go for personal purchase, and 40p mileage...

Now the experts can show us both why that's a bad idea!

Regards
Geoff

 

[MyAccountantOnline]

You need to compare the £4,000 you can claim for mileage against the tax you save on buying the car (which will qualify for a 100% tax allowance) and the tax charge on the benefit of the car. If you want to use this you can calculate the benefit (it depends on the fuel type) -

http://www.hjcca.co.uk/resources/tax_zone/tax_calculators/car_fuel_benef.php

 

[Geoff T]

You need to compare the £4,000 you can claim for mileage against the tax you save on buying the car (which will qualify for a 100% tax allowance) and the tax charge on the benefit of the car. If you want to use this you can calculate the benefit (it depends on the fuel type) -

http://www.hjcca.co.uk/resources/tax_zone/tax_calculators/car_fuel_benef.php

see what I mean about experts?!?

Nicola , good job!

regards
Geoff

 

[MyAccountantOnline]

see what I mean about experts?!?

Nicola , good job!

regards
Geoff

I would do the calculation but we dont know the fuel type

 

[Geoff T]

I would do the calculation but we dont know the fuel type

!!!showing off now!!!

but you're allowed!

 

[MyAccountantOnline]

!!!showing off now!!!

but you're allowed!

Thank you!

 

[johnsmith]

thanks Nicola, and Geoff for the efforts

sorry abt coming back late, long day

the fuel type is diesel. not sure how that would make a difference. could you pls enlist the difference between diesel/petrol/hybid for the same value and Co2 values.

any link to a website which enlist how to do the calculation -would be really appreciated

 

[MrPAYE]

Without trying to sound like a broken record from previous posts on cars (sorry Nicola), I'm afraid there is more to it than just looking at at the points mentioned.

To properly determine the best route you need to be clear about all implications e.g. the PAYE side for you as a director, the NI side for the company, VAT and corporation tax but also things such as how paying for the car (outright purchase v contract hire via some other lease arrangement), how much will this depreciate (biggest cost of having a car), how long are you going to have it for (can alter the annual cost considerably), etc.

I appreciate I'm not helping much in making your decision but it;s better to be forewarned.

 

[MyAccountantOnline]

Without trying to sound like a broken record from previous posts on cars (sorry Nicola), I'm afraid there is more to it than just looking at at the points mentioned.

To properly determine the best route you need to be clear about all implications e.g. the PAYE side for you as a director, the NI side for the company, VAT and corporation tax but also things such as how paying for the car (outright purchase v contract hire via some other lease arrangement), how much will this depreciate (biggest cost of having a car), how long are you going to have it for (can alter the annual cost considerably), etc.

I appreciate I'm not helping much in making your decision but it;s better to be forewarned.

No apology necessary I dont disagree in the slightest - it's where (like most matters) proper paid for professional advice is needed. A forum such as this can give some limited pointers. The link to my website to the calculator just enables you to calculate the tax charge on the benefit in kind.