Company Car Tax - Can I avoid it?

andyward82

Hi. I'm a company director and want to lease a car through the company for myself. I don't use it for work (apart from commuting) and have a budget of £500 a month. This will get me something quite nice like a Honda S2000 or Porsche Boxster. I've looked at carbon emissions, etc and the tax for something like that is nearly £4000 a year. Is there any way or technical loophole I can use to avoid this? Especially as I won't even really be using it for work? I don't want to have to get something really mundane just because it's costing me as much in tax for as it is in hire charges for a car!!!

Andy_L

Doesn't LPG conversion lower the tax.

Give youself a payrise of £500/mth & pay the income tax instead.

mattymoo

Can't see an LPG conversion being done on a Boxter

The only way I have ever seen it done was via a company car ownership scheme. The employer paid the employee an amount equal to the cost of leasing / insuring / maintaining the car less what the employee would pay in company car tax.

The employee then contract leased the car in their own name. Only benefit to employee was a free choice of vehicles though.

The old tax man is pretty wise to co car tax fiddles and you may just have to bite the bullet.

One final tip, the lease company we use gives us spreadsheet pricelists showing over 3000 car types / derivatives in my bracket (£400-600 a month). After deleting the estates and other cars I dislike etc I can then rank the spreadsheet by CO2 rating to give me an idea of tax cost. Useful for juggling the costs.

Remember, higher rate tax payers pay co car tax at 40%.

redux

There used to be lower tax on a van or pick-up as these were deemed to be for work, but I somehow don't think that's what you've got in mind.

If you're not really using it for work, and you think the taxman is ripping you off, why not buy privately instead and pay all your own expenses?

You never know, the depreciation, servicing, insurance and all other costs might even come to less than that amount.

Hintza

Andy_L wrote: »

Doesn't LPG conversion lower the tax.

Give youself a payrise of £500/mth & pay the income tax instead.

I would have thought this was the only answer. Which works out cheaper?

andyward82

Looks Like I'll Just Have To Award Myself A Pay Rise And Lease It Privately. I Pay 40% Tax So I'm Going To Get Stung.

Bloody Rip-off Britain Eh?

zappahey

andyward82 wrote: »

Looks Like I'll Just Have To Award Myself A Pay Rise And Lease It Privately. I Pay 40% Tax So I'm Going To Get Stung.

Bloody Rip-off Britain Eh?

Hardly a rip off.

I have some sympathy with those who genuinely need a car to do their job but yours is clearly a perk with no business use, and effectively puts another £500 in your pocket, so why shouldn't you pay the tax?

rjgreen4

andyward82 wrote: »

Hi. I'm a company director and want to lease a car through the company for myself. I don't use it for work (apart from commuting) and have a budget of £500 a month. This will get me something quite nice like a Honda S2000 or Porsche Boxster. I've looked at carbon emissions, etc and the tax for something like that is nearly £4000 a year. Is there any way or technical loophole I can use to avoid this? Especially as I won't even really be using it for work? I don't want to have to get something really mundane just because it's costing me as much in tax for as it is in hire charges for a car!!!

can you not take out a directors loan to pay for the car then pay it back @ 1% apr?

at least this way you are not paying £4000 a year on tax

gggareth

Lol .. It's a P***er..

I swoped to an allowance this year.. mine ended up at about 550... ( gross was nearly 1000) ..

no matter how you do it you pay for it..

Money_Grabber13579

rjgreen4 wrote: »

can you not take out a directors loan to pay for the car then pay it back @ 1% apr?

at least this way you are not paying £4000 a year on tax

Yeah but the company will be charged on beneficial loans at 25% and if the loan is over £5000 there will be a tax charge between the rate of interest paid and the official rate.

JQ.

Get a BMW, they are so much more tax effcient than other makes, although some are starting to catch up. The 3 litre diesel and 3 litre petrols engines are more efficient than competing brands. How about a Z4 or a 335?

I don't really understand why it's "rip-off Britain", a company car is a Payment in Kind and as such should be taxed.