Tax query...

Divorcing

Hello, hopefully someone can help or maybe point me in the right direction please.

If a company buys cars to lease to other companies, ie: as a car hire/lease company, what are the tax rules on the purchase and what they can claim.

Are they the standard rules, so the same as if they bought the car to use or for an employee to use (so 6-100% claimable in first year depending whether electric, Co2 etc) or are they treated like a product or asset, like if a marquee hire company bought a marquee and then leased it out then they can claim the full cost of the marquee in their expenditure.

Thanks

Ayr_Rage

Ask your accountant.

MyRealNameToo

Divorcing said:

Hello, hopefully someone can help or maybe point me in the right direction please.

If a company buys cars to lease to other companies, ie: as a car hire/lease company, what are the tax rules on the purchase and what they can claim.

Are they the standard rules, so the same as if they bought the car to use or for an employee to use (so 6-100% claimable in first year depending whether electric, Co2 etc) or are they treated like a product or asset, like if a marquee hire company bought a marquee and then leased it out then they can claim the full cost of the marquee in their expenditure.

Thanks

It's complex, especially if you are going to give customers the option to buy the vehicle at the end. Speak to your accountant. 

https://www.gov.uk/capital-allowances/business-cars 

Divorcing

Ayr_Rage said:

Ask your accountant.

Not helpful! I'm trying to save some money (clue is in the website name here!) by asking here in case someone knows the rules or can point me in the direction where I can find them before having to pay an accountant. 

MyRealNameToo

Divorcing said:

Ayr_Rage said:

Ask your accountant.

Not helpful! I'm trying to save some money (clue is in the website name here!) by asking here in case someone knows the rules or can point me in the direction where I can find them before having to pay an accountant. 

It is money saving to have a qualified accountant with Professional Indemnity insurance when you are talking about spending hundreds of thousands on businesses assets and dont know the appropriate tax treatment. 

Our accountant saves us more than their fees most years 

Divorcing

MyRealNameToo said:

Divorcing said:

Ayr_Rage said:

Ask your accountant.

Not helpful! I'm trying to save some money (clue is in the website name here!) by asking here in case someone knows the rules or can point me in the direction where I can find them before having to pay an accountant. 

It is money saving to have a qualified accountant with Professional Indemnity insurance when you are talking about spending hundreds of thousands on businesses assets and dont know the appropriate tax treatment. 

Our accountant saves us more than their fees most years 

Who said anything about hundreds of thousands?! No one... I'm very pleased for you that your accountant saves you so much money but I am asking about the rules that govern a certain area of taxation that is all, if you do not know or cannot help please just refrain from commenting.

Isthisforreal99

There are various ways you can claim capital allowances on the expenditure, that is why people are saying speak to your accountant who will have a better overall pictureof your business and the best method.

Free advice is not always accurate advice and nobody should be making such an important decision based on a strangers word.

Savvy_Sue

I'm pretty sure there will be an element of "it depends", which is why it needs someone who knows the rules to delve into your business and your plans and set out the options.

Just as an example, a community café I'm involved with has just had to register for VAT. No point asking here if we'd be better going for flat rate initially: it needs someone with sight of the numbers, our various income streams and our future plans.

MyRealNameToo

Divorcing said:

MyRealNameToo said:

Divorcing said:

Ayr_Rage said:

Ask your accountant.

Not helpful! I'm trying to save some money (clue is in the website name here!) by asking here in case someone knows the rules or can point me in the direction where I can find them before having to pay an accountant. 

It is money saving to have a qualified accountant with Professional Indemnity insurance when you are talking about spending hundreds of thousands on businesses assets and dont know the appropriate tax treatment. 

Our accountant saves us more than their fees most years 

Who said anything about hundreds of thousands?! No one... I'm very pleased for you that your accountant saves you so much money but I am asking about the rules that govern a certain area of taxation that is all, if you do not know or cannot help please just refrain from commenting.

Have you actually bothered reading the provided link that tells you about how cars are treated? 

As you are not selling the car its not a product but an asset, this is why VAT treatment is different and why if there is an option to buy may change the VAT treatment

uknick

This is a pretty complicated area of taxation with regard to the VAT and capital allowances.  You might be better off asking the question somewhere like AccountingWeb.

Any Answers | AccountingWEB

Grumpy_chap

Divorcing said:

Who said anything about hundreds of thousands?! No one... I'm very pleased for you that your accountant saves you so much money ut I am asking about the rules that govern a certain area of taxation that is all, if you do not know or cannot help please just refrain from commenting.

I think the reason no one is giving firm answers is that the specific area of taxation with which you are concerned (for both write-down allowances and for VAT) is complex and depends upon the details of the company setup, who the Clients are, financing options,how disposal of the vehicles is anticipated to be achieved, etc.  Even an individual who knows the rules that apply would not be able to provide you a meaningful answer based only on the information shared in the thread.

The reference to business expenditure of £100ks probably follows on from the initial query:

Divorcing said:

If a company buys cars to lease to other companies, ie: as a car hire/lease company,

Any company operating in that arena will require significant capital (or funding stream) to get established and will be of such scale that the professional services of an Accountant will almost certainly save more than the fees incurred so would be very money saving.