Work for SME loosing pool car need help

stressedbrian

I work for a small business and I had use of a pool car.

The two people I shared the car with have left the company and the car is too old and not viable to keep running (it belonged to the md before)

I have just been made a director and went to the garage to buy a replacement car. The company is quite new and we were declined finance. I ended up buying a car under my name ie personally.

How can the company pay me for the car?

Aquamania

stressedbrian wrote: »

I work for a small business and I had use of a pool car.

The two people I shared the car with have left the company and the car is too old and not viable to keep running (it belonged to the md before)

I have just been made a director and went to the garage to buy a replacement car. The company is quite new and we were declined finance. I ended up buying a car under my name ie personally.

How can the company pay me for the car?

Can't you just write a cheque?

paddyrg

Have to question if paying for it personally might cause trouble if the car needs warranty repairs. I could see this also becoming complicated if you do anything other than a straight sale to the company. Obviously any vat advantage has now been lost, assuming you're not personally registered.

You need to talk to your accountant.

One option to make things clearer might be if you can personally loan the money to the company, then the company makes the purchase (arrange that with the garage, it's all above board to do so), or if you can guarantee the finance for the company buying the car.

zygurat789

paddyrg wrote: »

Have to question if paying for it personally might cause trouble if the car needs warranty repairs. I could see this also becoming complicated if you do anything other than a straight sale to the company. Obviously any vat advantage has now been lost, assuming you're not personally registered.

You need to talk to your accountant.

One option to make things clearer might be if you can personally loan the money to the company, then the company makes the purchase (arrange that with the garage, it's all above board to do so), or if you can guarantee the finance for the company buying the car.

What VAT advantage did you have in mind since the input VAT on cars is not reclaimable from a normal purchase.
Since the company required finance to pay for your car I would have thought it would be unable to just write you a cheque (that didn't bounce).
You are now a director, show some faith in the company. The car becomes a company asset and the company has a loan to you. This transaction can easily be recorded in the company's books. How and when the loan is repaid is up to you and the company to agree.

Prothet_of_Doom

How many people will now need use of this "Pool" car?

How many people take the car home and use it for occassional private use?

How do you get to work?

If it is a pool car, and nobody gets to take it home, (and there are no personal company car tax implications), then you should treat it as a loan to the company, perhaps paid in installments over 12 months, but if it's only used by you and you use it to for private use then think about the company paying you 45p a mile for business miles.

paddyrg

What VAT advantage did you have in mind since the input VAT on cars is not reclaimable from a normal purchase.

I'm (clearly) not a VAT accountant, so if it makes no difference then that's great for the OP. Just if there *was* any kind of advantage eg for interest payments/lease/agricultural vehicle/whatever then a non-VAT-registered person in the chain would mean suffering the VAT.

I still imagine there would be some advantages to the company buying the vehicle direct if for instance warranty repairs are needed, but it has no contract with anyone but the OP.

zygurat789

paddyrg wrote: »

I'm (clearly) not a VAT accountant, so if it makes no difference then that's great for the OP. Just if there *was* any kind of advantage eg for interest payments/lease/agricultural vehicle/whatever then a non-VAT-registered person in the chain would mean suffering the VAT.

I still imagine there would be some advantages to the company buying the vehicle direct if for instance warranty repairs are needed, but it has no contract with anyone but the OP.

The company may buy and own the car but the name on what used to be called the log book had to be an individual. Whether this has changed since the advent of the new registration document I do not know but the driver of the car is the one who will have contact with the garage and the magic words are "invoice the company" and the input vat's in your pocket.