Business Car Insurance Discussion

Londonbased01

Hello everyone,

I'm here asking for advice regarding some what of a myth. I've heard it batted around before about how its cheaper to obtain your car insurance through a business - which is likely true.

What I need help to figure out is this - would it be cheaper to create and set up a business with all the proper documents and put enough money through it to just keep it ticking over etc and then in turn have my family members as board members or some position in the company to obtain various savings. ( Sole purpose would be savings on insurance)

Assumed savings would include

1) My 21 year old son's Car insurance & his leasing agreement with a company being allowed a 'business rate'.

2) My 17 year old daughter's car insurance.

3) Possibly my 19 year old son's car insurance as well.

Costs : Set up costs, possible running of the website etc?

Apologies if this has already been talked about in the forum I had a google and struggled to find such related forums.

Thank you for your time & comments

InsideInsurance

Its not cheaper to get insurance or leases via company and certainly not in the way you are talking.

The benefit comes from the fact you can offset both against the companies income and so you still pay similar prices but save 20% corporation tax. For leases as well, assuming the company is standard VAT registered then you can recover the VAT element.

If your company isnt trading then there is no profits to offset against and so no tax savings to be had.

Add to that the fact that if the lease is in the company name and there is personal use of the vehicle then you'd have company car BIK to pay which can be very high and normal BIK to pay for those having their car insurance paid by the company.

The other problem is for leasing the company is the one thats credit scored and you'd normally have to be trading a couple of years.

Finally, the whole thing would quickly look a scam when the company returns show it not trading and yet having outgoing of all these insurances & leases being paid for by continuous director loans.

Londonbased01

Well, that's that idea well and truly in the bin!

Thank you for the info!