Car Lease after finishing with my Ltd Company

loopyloo338loopyloo338 Forumite
5 Posts
First Post
MoneySaving Newbie
Hi
I am waiting for a straight answer from my accountant and just wanted to see if anyone has a view.

I worked through my own limited company for 12 years, I took out a new lease car agreement in my company name in April last year, but decided to give up contracting and secured a permanent role in September last year.  to get out of the car lease agreement was going to cost too much money so my accountant advised that I pay money into my business bank account to cover the payments which is fine and wasnt advised as to any changes to my tax code which is reduced to account for the car benefit.

I have now been advised that the money I pay into my business account and the DD for the lease payment should be allocated to my Directors Loan Account in effect offsetting each other. So my question is should the car benefit also be removed from my tax code as I no longer do any work for my Ltd company so am not receiving any benefit?
Does anyone have a view on this?

Thanks

Replies

  • edited 19 June 2020 at 7:19PM
    brisbris Forumite
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    edited 19 June 2020 at 7:19PM
    You do still benefit from the car if it's still the one you drive. You are still driving the company car so you still have that benefit.

    Paying it as a directors loan doesn't make any difference to that, until you close the company you are still the director and still having to file tax returns. Having the car in the company might mean you can't even file dormant accounts but your better asking your account about this.
  • loopyloo338loopyloo338 Forumite
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    MoneySaving Newbie
    Thanks for your reply.

    So even though I no longer work for the limited company have been P45'd and the company doesnt pay anything towards it it is still classed as a benefit provided by my limited company?  Where is the benefit I am receiving? This is what I am struggling with.


  • Grumpy_chapGrumpy_chap Forumite
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    You are getting the benefit of a company car.
  • AnniseleAnnisele Forumite
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    So even though I no longer work for the limited company have been P45'd and the company doesnt pay anything towards it it is still classed as a benefit provided by my limited company?  Where is the benefit I am receiving? This is what I am struggling with.


    But it sounds as though your company *does* pay something towards it. You put money into your company, then your company uses that money to pay for the car. The car is leased by your company, not by you personally - so when you use the car, you're using something paid for by your company.

  • loopyloo338loopyloo338 Forumite
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    Ok even though my own personal money is being paid into the business bank account to pay for the car? The limited company isnt generating any money now so contributes.nothing?

    Sounds like I need to get rid asap as I still cant see where I am getting a benefit when I am paying for it myself.
  • loopyloo338loopyloo338 Forumite
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    Ok thankyou all. I will just carry on and look to get rid of it asap. I can kind of see if I pay in money and the company uses it to pay for a car I am getting a benefit it just feels weird to be using my own money and get taxed by a compang I no longer work for.
  • Grumpy_chapGrumpy_chap Forumite
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    You only need to loan money to the company now because you took too much out of the company in the past leaving insufficient funds for the company to satisfy liabilities.

    Your Accountant should be able to advise you on this.  The company will need to be clear of liabilities before it can be voluntarily struck off.
  • brisbris Forumite
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    Sounds like I need to get rid asap as I still cant see where I am getting a benefit when I am paying for it myself.
    But this is what we are trying to tell you, you are not paying for it yourself. the company is paying for it. What you do is loan your company money which goes into the directors loan account. This is what you need to grasp, the company is it's own legal entity which you are currently loaning money too.
  • Grumpy_chapGrumpy_chap Forumite
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    Have you asked the lease company if they will allow you to change the lease from the company to you as an individual?
  • loopyloo338loopyloo338 Forumite
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    MoneySaving Newbie
    Have you asked the lease company if they will allow you to change the lease from the company to you as an individual?
    Yes already asked this and it cant be changed.
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