scott8629

Im a director of a small limited company and as I know nothing about company cars I thought I would ask the people on Scoobynet.

So here goes..........

Are there any advantages of running a company car?
Im thinking of buying a Skoda Fabia VRS and was wondering if it would be cheaper putting it through the books.

So can you give me any advice on this subject please.

TIA

Scott

Lum

You'll get taxed to death if the car puts out more than 4 molecules of CO2 a year (assuming you're going to have private use) and get even more tax if the fuel is put through the company too, probably better to pay yourself mileage, especially if you're in the top tax bracket which I imagine you will be as a director.

I'm doing much better off with a private car and a generous car allowance paid as mileage and a fuel card that is put through as mileage and I'm in a low tax bracket.

Wish

iTrader: (2)

I run a company car. Its a fuel guzzaling Jaguar 2.5 SE Estate AUTO.
And its will be my last company car.

There are no benifts to a company car anymore. The sooner Im out of it the better.

scott8629

No im not in the top tax bracket. Im a silent director and I do not take any money from the company. I earn a living in an other job but I get lots of time off as I work shifts.

Thanks for the advice!

Scott

Diablo

Advantages - you don't pay NI contributions on the taxable benefit, just tax.

As its "your" company you could still pay yourself the max allowable by the inland revenue for mileage charges.

Your car will also depreciate - depreciation of a company owned vehicle will, of course, be charged through your company and thus offsetable against corporation tax.

depreciation of a privately owned vehicle is not offsetable against anything and comes out of your pocket.

A private purchase will be made from taxed income. Assuming you are at 40% tax bracket, you £16k Skoda (or whatever its costs) will, in fact, have cost you £16,000 + 40% which is £22,400. More if you finance it.

Its not quite as simple as looking at CO2 values and taxable benefit values.

best advice I can give you though is ask your accountant

hope this helps

D

Lum

You also have to consider the leasing vs buying situation.

My company wanted me to lease a BMW320 which worked out at about £300 a month out of my pocket.
It was cheaper for me to take out a loan and buy my Legacy, repayments are about £260 a month and at the end of it all, I own a car!

Tiggs

scott, i am in the same position as you......no point in co. car in 98% of cases

jackies

The CO2 values i would say are important when buying a company car. For example a couple of years ago i had a Suzuki Jimny1.3cc (sh*t i know) that cost the company £10,000 and the CO2 value was 184g/k and was a X reg. My brother had a Golf 1.9td that cost around £20,000(extras included) and was a Y reg, with a CO2 value of 138g/k.
We were both company directors taxed at 40% and earned the same amount of money. The difference in our tax was that he paid £1 more than me in tax for a faster,newer and more expensive car. Thankfully i now have got rid of that Jimny and have my own Golf and am paying less tax than before!!