Best way to run a vehicle

Captain_Gaz

Hi guys and girls, just looking for a heads up or advice on the best way to buy a car through a new, LTD business. I have a small lump sum to put up towards a pick-up truck that I plan to get sign written. I am not VAT registered immediately, but will be if my turnover goes over the threshold. I’m just concerned that if I put up a lump sum for a car and my business isn’t working out 12 months down the line, I’d like to limit my personal liability and be able to take either the car, or it’s value back out of the business. Business is being run from home so my overheads are low, and if I have to wrap the business up it will purely be because it isn’t working as I wanted it to, not because of bad debt. PCH? PCP? BCH? Any input is more than welcome, thanks 😊

System

> I’d like to limit my personal liability and be able to take either the car, or it’s value back out of the business.

Buy the car in your own name rather than the business and insure it for business use and pay yourself mileage via your company.

Depending on the expected mileage none of the options you listed may be suitable.

trailingspouse

I agree with Tarambour, and that's exactly what we do with our cars - we run them as private cars (bought with a combination of trade-in and 5-year loan), then reclaim our business mileage from our limited company. As for insurance, we only need Class 1 business use, which is normally free - but you would need either Class 2 or Class 3 as I'm guessing you carry stock/equipment/people as part of your business.

However - this isn't the best way forward for every scenario, so you really need to talk to your accountant to decide what's best in your specific situation.

fishybusiness

I’d like to limit my personal liability and be able to take either the car, or it’s value back out of the business.

This.

If your business isn't working, I'd guess 12 - 18 months down the line you would have money/ cash flow problems, meaning you wouldn't be able to take the value back out of the business.

Buy the vehicle and take mileage to support its upkeep.

We have been advised the same by our accountant - trading for 3 years now and our business owns and runs 1 vehicle, and I fancied a truck too. Accountant said buy it yourself and take the mileage.