Buying a car through a business?

seismicryan

Hi,

I am not looking to get a new car just yet, but when I do I am considering my options with regard to buying it through my business..

Can someone give me the ins and out of buying a car through the business? Advantages, disadvantages, unexpected stings, that sort of thing?

I will obviously look to talk in detail with my accountant nearer the time, but I just want to get some details so I can let the idea roll around in my head for a while

Thanks!
Ryan

mizzbiz

Are you a sole trader or director of a Ltd company?

Is the car solely for business use or is it a mix of business personal?

easyhost

mizzbiz wrote: »

Are you a sole trader or director of a Ltd company?

Is the car solely for business use or is it a mix of business personal?

regardless if your are sole trader or ltd company, if the car is kept at your residential address you can only claim a percentage off the business.
this is what i was told when i attended a day course from the HMRC as they say if its at your home address you can be tempted to use this to nip to the supermarket to do your shopping which is not business related

seismicryan

Well, Im actually a registered sole trader AND director of a company..

I was intending however to purchace it through the limited company as it is VAT registered and I was thinking that would save 20% right away?

Also, regarding personal use.. yes this would be my personal as well as work vehicle, but how does a "company car" work if you are not allowed to use it for personal use too?

Thanks for any input... I realise I can find info online but I always think it is good to hear from people who have been there and actually followed the rules rather than just reading them

EDIT: I have actually just been reading a bit more on the subject and it seems there are lots of taxes involved when you buy it through a company making it less advantageous.. plus, it seems you cant even claim the vat back.. DOH!

Ryan

bris

Buying a company car is now very expensive when it come to tax, the best way is to buy it personally and charge the business for it's use, i.e 40p per mile etc.

seismicryan

Yeh, the 40p per mile is what I had been doing so far.. the main reason I was thinking that buying it through the business would be better was to save on the VAT, but unless I buy a commercial vehicle, I cant reclaim the VAT..

Ryan

easyhost

seismicryan wrote: »

unless I buy a commercial vehicle, I cant reclaim the VAT

thats because the rules changed a few years ago as a majority of company cars were being used for personal use and all usage claimed for.

if you had a separate place of business well away from your residential address and this is where to company car is kept and only used for the business and you can prove this then i think you can claim the VAT etc. as it is being solely used for the business.

but if you are keeping this at home then the best way is to purchase this privately and charge the business, so if it is rented as such to the ltd company and the company goes into liquidation then the vehicle cannot be classes as an asset as it is only rented to the company.

firstinflight

Also, worth bearing in mind that if the business becomes insolvent, you will lose the car if the Ltd company owns it.