Leasing UK car on US credit card

frasermurray

Hi,

Pretty much the title sums it up. I want to lease a car in the UK with my employers US Credit card.

I'm a British citizen, working for a US company in London. They let us lease out cars in the UK but don't have a British credit card.

No car leasing company seems to accept US cards.

Any help would be great!

forgotmyname

Setup a direct debit, Bank transfer? They pay you and you pay them?

InsideInsurance

Are you the only UK employee? How do they manage to make salary payments to you if they have no UK banking facilities?

As long as the contract is signed by the company you could pay for it yourself (ideally with a cashback or points credit card or such) and then expense it back to the company. If you leave before the lease is completed then you cancel the CPA with the card issuer and the lease company pursues the hirer which is the your employers and in the mean time you've backed the cashback/ points from the venture

frasermurray

We have a UK payroll system in place.

For tax purposes should I rent as a sole trader? Can I even do that?

I'm a little lost when it comes to all this.

I've just transferred from the US and I know fuel prices are a lot lower over there but my company was leasing me a vehicle with fuel, insurance etc included for roughly $800-$900/month. I was driving roughly 700-1000 miles per month.

Can I expect something similar over here?

I appreciate your help.

RDG

Depends on the car?

At around £525-600 per month you could probably get a decent car (Mercedes C class are around £300 per month on a business lease) and have the money for fuel and insurance but it will depend upon your insurance costs as you have no history here you will probably have 0 no claims.

InsideInsurance

frasermurray wrote: »

For tax purposes should I rent as a sole trader? Can I even do that?

You said you were an employee and your employer was leasing it? Now you mention being a sole trader??

As a sole trader you can hire a vehicle but then its the same as hiring it as a private individual as there is no "company" when you're a sole trader.

The challenges here will be over tax. If the car provides a vehicle for you FOC (or reimburses the cost of one) then you will have to pay tax on it as a Benefit In Kind. If you look online you will find BIK calculators for company cars.

In most cases companies dont provide fuel (again there is BIK to pay if they do) but instead simply pay you mileage at the government set rate. If they are providing the car then its 13p-26p per mile depending on the fuel and CC of the engine. If it is your car and you just get a cash sum in lieu of a car then mileage is 45p for first 10,000 miles a year and 25p there after.

Depending on what sort of car you like driving, tax band etc then some find it better to have a cash sum in lieu of a car and personal mileage rates rather than a company car and having to pay tax on the BIK

frasermurray

Sole trader is what most companies are telling me to do. Again, the jargon involved is confusing me.

My US employer told me to figure a car ASAP. It sounds like the leasing is too complicated and I should just buy a car myself?

I thought it was just as easy as me leasing a car and expensing the milaege each month back from my employer.

:mad:

RDG

You could lease it on a personal contract and then claim your expenses back.

If you did it as a sole trader you would still have to pay the VAT so it wont make any difference to the cost. Leasing is not complicated but I think its being made complicated by you discussing business leases with people when you arent in a position to get one.

As Inside insurance says there are tax implications if the company provides the car. If they provide a monthly car allowance for the vehicle and insurance this would then have your normal tax rate applied, which maybe simpler than the BIK method, then at the end of each month apply for your mileage.

Or you could pay for everything up front and then claim your expenses back at the end of each month but as the car would also be for personal use there is going to be some tax implications which will need looking at.

frasermurray

The way I want to do it is lease the car in my own name and have my employer reimburse me for the monthly charge.

I can then get my employer to reimburse me for mileage.

My head is hurting.

InsideInsurance

frasermurray wrote: »

Sole trader is what most companies are telling me to do. Again, the jargon involved is confusing me.

My US employer told me to figure a car ASAP. It sounds like the leasing is too complicated and I should just buy a car myself?

I thought it was just as easy as me leasing a car and expensing the milaege each month back from my employer.

First of all "most companies" are who exactly?

A sole trader would only apply if you were self employed rather than an employee. As far as a leasing company is generally concerned, there is no end difference at all if you are a personal customer or a sole trader customer. The only difference is that for the former they include VAT in the prices they talk about and in the second they give prices excluding VAT but VAT is payable in both cases. If you were actually a sole trader AND VAT registered then the VAT would be recoverable which is why they dont bother mentioning it in prices because it doesnt hit your bottom line.


The easiest way to deal with it is they give you say £600 a month, you pay tax on it. If you buy or lease a car is 100% up to you. When you submit expenses you simply add on the mileage at 45p/mile for the first 10,000 in the year and 25p/mile for anything after that.

Unless you drive cars with good green credentials then this is normally better for you than getting a company car etc.

InsideInsurance

frasermurray wrote: »

The way I want to do it is lease the car in my own name and have my employer reimburse me for the monthly charge.

You would need to check this.... if you expense it explicitly you may find it is counted as a company car because you're basically being given a car.

If however you find out the car is going to be £400 and you know you are a 40% tax payer and agree the employer gives you a car allowance of ~£675 a month as part of your contract then you are safe from BIK as you've paid tax on the extra income. Plus it counts as a personal car and so can claim the hire mileage rates