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Accounting Question - Getting an Electric Vehicle as a Company Pool Car. Best method?
Retired_Minky
Posts: 176 Forumite
in Cutting tax
I'm looking to get a pool car for a Limited Company for the staff to use. The car would be kept at the company overnight and would be used by multiple staff to transport customers to and from our premises.
Note - Annual profit for the company is expected to be in the region of £12k.
I was looking at the best option for this from a financial perspective. Option I can think of are:
1) Buy an electric vehicle. Not decided on a model but I'd be looking in the region of £26k to £30k for a 7 seater electric vehicle (e.g Nissan e-N2000). Looking online I can see you can get 100% first year allowance on the purchase. I understand I can use this to deduct the tax I pay on my annual profit. However as I don't make £26k - £30k profit would I be able to roll over that deduction to year 2 (and potentially year 3)?
2) If I lease a vehicle my understanding is the cost is fully deductible from profit regardless of whether the vehicle is electric or not.
I'd prefer to buy but only if I can carry over the allowance. Otherwise I think leasing might be the best option.
Any other recommendations on the most efficient way to purchase/lease would be appreciated.
There is no employee BIK to worry about as the vehicle would be exclusively used for business purposes (transport for customers).
Thanks in advance for any advise.
Note - Annual profit for the company is expected to be in the region of £12k.
I was looking at the best option for this from a financial perspective. Option I can think of are:
1) Buy an electric vehicle. Not decided on a model but I'd be looking in the region of £26k to £30k for a 7 seater electric vehicle (e.g Nissan e-N2000). Looking online I can see you can get 100% first year allowance on the purchase. I understand I can use this to deduct the tax I pay on my annual profit. However as I don't make £26k - £30k profit would I be able to roll over that deduction to year 2 (and potentially year 3)?
2) If I lease a vehicle my understanding is the cost is fully deductible from profit regardless of whether the vehicle is electric or not.
I'd prefer to buy but only if I can carry over the allowance. Otherwise I think leasing might be the best option.
Any other recommendations on the most efficient way to purchase/lease would be appreciated.
There is no employee BIK to worry about as the vehicle would be exclusively used for business purposes (transport for customers).
Thanks in advance for any advise.
0
Comments
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If you don't claim the full 100% in year of purchase, you can carry the balance forward, but then you can only claim the fixed percentage WDA in subsequent years so it would be claimed for over several years. You can't, say, claim a third in each of the first 3 years.0
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Is it possible to claim the 100% in year of purchase, so putting the company into loss for that year. Then carry the accounting loss forward and reduce the balance sheet loss until the company returns to profit in year 4?
If the company has insufficient retained capital to fund the vehicle acquisition, is lumbering the business with a debt the most sustainable decision?0
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