Company car question

mbmaidenhead

Up to now, I've always bought cars myself. And always second hand. However I'd like to look at other options such as buying / leasing one through the business in the next 6 months or so. 
My income, a combination of salary and dividends puts me in the higher tax rate, and the business is relatively profitable, and we have a chunk of money in the bank, so I'm looking at tax efficient ways of taking money from it.  
I would probably be looking in the £60-£70k market, and don't have any particular preference as to new or something 12-24 months old.
It would be electric, and my mileage would be around 12k / annum
There seem to be a lot of different options, PCP, HP, outright purchase, salary sacrifice etc. so trying to work out which one is the better option isn't easy. 
Do people have any suggestions as to which direction I should be leaning towards, and anything i should be wary of or avoid? 

Thanks

Mildly_Miffed

Talk to your accountant.

Grumpy_chap

mbmaidenhead said:

Up to now, I've always bought cars myself. And always second hand. However I'd like to look at other options such as buying / leasing one through the business in the next 6 months or so. 
My income, a combination of salary and dividends puts me in the higher tax rate, and the business is relatively profitable, and we have a chunk of money in the bank, so I'm looking at tax efficient ways of taking money from it.  
I would probably be looking in the £60-£70k market, and don't have any particular preference as to new or something 12-24 months old.
It would be electric, and my mileage would be around 12k / annum
There seem to be a lot of different options, PCP, HP, outright purchase, salary sacrifice etc. so trying to work out which one is the better option isn't easy. 
Do people have any suggestions as to which direction I should be leaning towards, and anything i should be wary of or avoid? 

Thanks

You need to speak with your Accountant.

If buying a company car via the Ltd Co for which you are Shareholder and Director, then the car has to be EV to gain from the low BIK-rates (personal taxation) and also the first year write down.  The first year write down is only available if the car is brand new first registered keeper - a second hand or pre-reg EV won't benefit from the first year write down.

Note - tax rules may change at any time.

For this to work as a company car, the invoice has to be made out to the Ltd Co., and not to you as an individual.  This can affect the "incentives" that might be available which are often restricted to "retail sales only" and exclude business transactions.  Some car manufacturers have a bit of flex on this in that the "retail sales only" incentives are replicated for their definition of "micro-business" sales also.
The fact the invoice has to be made out to the Ltd Co may restrict the availability of finance offerings so, especially as you have the money in the company, you may find an outright cash purchase the simplest.