Buy car personally - or Ltd Company?

Susan_Mee · 17 March 2018 at 5:18PM

Hi - I’ve just set up a limited company, where I am the sole employee/shareholder. I was wondering if someone could advise me on the best way to buy a car.?
I’ve been told by my accountant that it would better to buy the car myself - and then claim back 45p a mile.
The alternative is for my ltd company to buy it, and claim back some of the cost as it’s a capital asset of the company. The downside of this being that it means I would pay extra tax as an “benefit in kind.”
I only do about 5,000 miles per year.
The car I’m looking to buy is a Fiat 500 0.9 engine.
Appreciate this is only a thumbnail sketch, but. What do
you think is best.

Savvy_Sue · 17 March 2018 at 5:58PM

If you're paying an accountant, I think it's best to take their advice.

No-one here can give better advice because your accountant will have done some 'due diligence' around this question and knows your business - we don't. No-one here can give better advice because you can't rely on what we say, in other words if we get it wrong you can't sue the pants off us because you have no idea who we are!

00ec25 · 17 March 2018 at 7:52PM

you are paying an accountant and the accountant has given you the only sane answer that applies. Do not buy a company car or you will be crucified by the personal tax bill

Pennywise · 17 March 2018 at 7:59PM

With company cars, the details are important. There are no generalisations. For some people a private purchase is best, for others the company option is best. It all depends on private versus business mileage, type of fuel, list price when new, whether you're buying new or used, the purchase price, emissions, marginal tax rate of the company and your personal marginal tax rate. The only "generalisation" is that for most limited company owners wanting a pretty standard car, doing pretty average mileage, it's generally detrimental to go down the company car route. However, if you're buying a very low emission, electric car, van or really low priced car, it "may be" better to buy through the company. Like I say, devil is in the detail. Why don't you trust your accountant?

Buy car personally - or Ltd Company?

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