Scaffolder

Being in the fortunate (or unfortunate, depending on how you look at it) position of a company director, I'm looking at getting a new WRX. Does anyone know which option works out cheaper overall - leasing through the company and paying tax as a BIK, or a private lease with an increased salary?

martin_oleary

Hi sorry I can't give you a definitive answer, but was in the same position a few years ago and opted to contract hire through my company, primarily, looking back, so I could get one quickly, at the time there was a 6 month wait for new one but leasing companies could get them in a couple of weeks, oh how things have changed. My accountant said that broadly the more expensive the car the better of you'll be leasing through the company, however this was 5 years ago and I’m sure tax rules etc have changed since then. I was never that good at keeping track of where my company money went, but I do know I paid a huge amount of money on the lease and my personal tax allowance dropped to nothing. Of course I also clamed a lot of VAT back on petrol and the hire price, I’m also extremely glad I took out the maintenance option, which for £60ish a month covered all servicing along with tyres brakes etc which worked out very nicely for me as I was doing 150 miles a day and going through 4 tyres front disks and pads every 7.5k miles (being a hire car somehow made me drive quite enthusiastically).If I were to be in the same position again I would definitely not hire, you are just too tied in and never own the thing, though I guess to a degree it shields you from depreciation, that said the hire companies will have done their sums and I guess you’ll pay for that somehow. If you want I can dig out the figures, tax codes invoices etc and pm them to you? I think a precise calculation on which is cheaper would depend upon your own circumstances, how many miles, how stable the company is, how long you want to keep it, how flexible you want to be. I’m sure your accountant could give you a more accurate idea though.


Martin

Scaffolder

Cheers, am going to have a word with our accountants, and also one of the leasing companies which has company and personal schemes - see which option they suggest. Currently doing over 30k miles a year, so either option isn't going to be cheap.