gareth

Hi,

Like one or two others on here I'm an IT contractor and I've run my scoob for the last 3 years as a company car through my ltd company.

Just wondered what the obstacles would be to doing the same with my next car if it happened to be an import - thinking of B4 wagon.

Getting the finance and insurance wasn't exactly straightforward last time... is it likely to be a nightmare with an import? Any other pitfalls I need to know about?

Gareth

Lizzywizz

Gareth,

I bought my three year old STI wagon two months ago as a company car. No problem at all with the finance - in fact because I was buying from a private individual, they just agreed the approximate amount, which I initially paid from the company bank account, and once I'd bought the car, I gave them the details and they refunded the full amount two days later. Not sure they even realise that its an import!

Insurance was a little more tricky with my exising insurers originally saying that they wouldn't insure it. However, I pointed out to the broker that it was almost identical to a UK spec car and that all the parts were readily available in the UK. They then changed their minds and said they'd cover it for an extra £60 on top of my £950 premium for my M3, which I was more than happy with!!

So as far as I'm concerned there is no problem. Not sure what happens with the company car tax next year though.... there don't seem to be any emmissions readings for an STi!

Lizzy

gareth

Thanks Lizzy,

I guess I'm worried about finding a finance co that's prepared to underwrite the full cost of a new car for contract hire. They seem to go off standard rates for depreciation/servicing etc then calculate the monthly payment. Any specialists out there?

Cheers,
Gareth

Simon K

Gents,
Im an IT contractor but didnt think that buying my car via the company worth while. I do about 700 miles a week and found charging back 64p< 4k or 36p> 4000 miles /p/a far better.Im not saying your way is wrong and mine is right, no, just couldnt see and was advised that the advantages unless you did 100K a year and have lots of serivces and tyres to claim but vat etc, wasnt worth it.

I therefore use my Supra / M3 evo as private cars for business use. Ive altered the insurance for business use, an extra £50.

Can someone explain ??

SBK

gareth

Hi,

I'm never entirely convinced about whether it's worth it or not.

The personal tax hit is fairly severe, but as I understand it this is outweighed by a few benefits: the biggest is that the monthly rentals come out of non-taxed income.

Say the monthly rental was £500+VAT, that's an actual cost to the company of £400 after allowing against MCT. To make the equivalent payment myself, I'd have to find £587.50 (inc VAT) out of my net earnings. Assuming 40% tax and forgetting about NI for now, that's a gross payment to me by the company of about £980 to fund that monthly payment - more than double the original £400 and way more than the tax due on the benefit in kind.

Whilst I'm at it, the entire value of the benefit in kind can be deducted from the IR35 deemed payment calculation, giving you a useful £7-10K over the year on the balance sheet to cover company expenses, training etc or just draw as a dividend.

I'm no accountant so let's hear it if I'm way off the mark with this!

Cheers,
Gareth

Stuart Knight

iTrader: (2)

IR35? Whats that then? . Head firmly in sand hoping it will go away, run a business in its own right etc, etc

[Edited by Stuart Knight - 10/22/2001 2:01:14 PM]

Jonathan Witts

Hi Guy

If you need a grey friendly car leasing company then call Rick Morris @ AMI motor management 01992 554184.

My current car is a B4 on HP (private) from Rick, prior to that I had a tuned 360bhp Lexus GS300 on a full maintenance car lease through the company !!!!

Tell him I put you on to him .

Jonathan Witts

GRANT

Gareth,
Lombard Finance have no problem financing imports.Just been quoted 8.5%apr which works out at about 4.25% interest on my new STi7.
If you need their number let me know.

Grant

Scumbag

I've just bought (3 weeks ago) a B4 RSK as a private car, but insured it for business use, and am using in place of a company car.

Couple of things to remember...as the engine size is under 2l (all be it with a couple of turbos bolted on), the p per mile thatthe revenue allow is 45p for the first 4000 business miles and 25p per subsequent mile

Regardless of engine size (>1.8l?) the extra benefit will change as of April 1st to 40p per mile for the first 10000 miles, and 25p per mile thereafter.

However note that there is the alternate way to calculate the amount of tax allowance (if you have bought the car outright) - known as the"exact" method. With this you add up exactly what the car cost you over the year...petrol, insurance maintenance, and most importantly for a new car depreciation (although this is limited to £3000 per year, you can "carry this forward" to the year when you sell, and anything above this amount per year can be considered in full in the final year). You then take the % of business to private miles (for me this is about 90% business), and use this as your allowance.
This is what I'm doing, and I know that over 3 years I will end up a few thousand pounds better off (although it is a bit of a pain to keep all the paperwork). In fact you can actually choose at the end of the year which method to use when you put the dreaded tax return in

For interest I've insured via Tescos 34,car parked on driveway, girlfriend to drive, up to 25,000 miles pa, full business use etc, £1200 fully protected ncb.

Sb