Business Contract Hire as PAYE

psyk_ko

Hi
I was wondering what are the possibilities and legalities around taking a business contract hire car while I am a PAYE. Essentially I am a full time employee of a big firm. They offer car benefits but the charges tend to be higher. I have a company that is registered in my name. Can I use that company to take out only a car for myself using the money I get from my salary to fund it? PCH tends to be pricier than BCH, so was wondering.

neilmcl

The reason PCH seems higher than BCH is because the prices of BCH are exclusive of VAT.

bluesnake

of they make you redundant on month 23, which is the better scheme for your pocket?

psyk_ko

Sorry, I did not understand that. Who makes me redundant? My own company?

InsideInsurance

PCH and BCH tend to be the same price for a single vehicle and its only the fact that one is listed without VAT that it makes it appear cheaper.

Ultimately you can speak to a company and see if they are willing to accept you as a business customer. I would avoid using your own Ltd as you then will have BIK to pay as it'd be a company car but you can do it as a sole trader.

If you did decide to do it via your Ltd then they will be wanting to credit check your company as well as probably wanting a personal guarantee and if your company is dormant then they are unlikely to want to give it a credit line

Shielder

Hi psyk_ko, I looked into doing this earlier on this year, but decided against it because the cost on PCH was the cost on the website, but going the business route would have been more complicated and more expensive.

The cost on the website is excluding VAT, so there is 20% to add on to that.

Then there is the company car tax to add on (£3k per year for my Avensis :eek:)

So I decided to go with the PCH route. Now there will be people on here that dispute my numbers (no doubt I've got something wrong), but I figured that it wasn't worth it for me, strangely enough, my accountant agrees. Go figure.

Andy