Buying as a private owner or through my limited company?

[Sprinty]

Hi there,

I have an i3 coming in a couple of weeks and I'm still not totally clear on which way to finance the i3.

I have a LTD company so plan to use the benefits that brings with it regarding cars in the UK

The two options, as stated in the subject, are:-

1. Buy privately and claim 45p a mile (for first 10000 miles, which I hope I don't exceed as that's my milage limit with BMW anyway)

Or

2. Buy through the company and claim money back through money off corporation tax payments.

I tried speaking to BMW but they don't seem to know which would be most tax efficient, I wonder if I can pick some brains of people to get some insight of which way to go?

Thanks

 

[noakey]

Hi there,

I have an i3 coming in a couple of weeks and I'm still not totally clear on which way to finance the i3.

I have a LTD company so plan to use the benefits that brings with it regarding cars in the UK

The two options, as stated in the subject, are:-

1. Buy privately and claim 45p a mile (for first 10000 miles, which I hope I don't exceed as that's my milage limit with BMW anyway)

Or

2. Buy through the company and claim money back through money off corporation tax payments.

I tried speaking to BMW but they don't seem to know which would be most tax efficient, I wonder if I can pick some brains of people to get some insight of which way to go?

Thanks

Hi.. I have done a 3 year lease through my limited company. It's cheaper than a personal lease. I am paying the same for a 20k per year lease as the 10k personal.

I guess you need to weigh up how much business milage you do. 45p per mile over 10000 miles probably won't cover your repayments.

I recommend getting a personal quote and a company quote and weigh it up.

In terms of tax efficiency the company route is by far the best way at the moment. It's also good to pay a big chunk up front as you can offset the first year 100%.

Just my views. . I am not a financial adviser. . Just careful and efficient with my money..

Happy buying.. neil

 

[Sprinty]

Hi there,

I have an i3 coming in a couple of weeks and I'm still not totally clear on which way to finance the i3.

I have a LTD company so plan to use the benefits that brings with it regarding cars in the UK

The two options, as stated in the subject, are:-

1. Buy privately and claim 45p a mile (for first 10000 miles, which I hope I don't exceed as that's my milage limit with BMW anyway)

Or

2. Buy through the company and claim money back through money off corporation tax payments.

I tried speaking to BMW but they don't seem to know which would be most tax efficient, I wonder if I can pick some brains of people to get some insight of which way to go?

Thanks

Hi.. I have done a 3 year lease through my limited company. It's cheaper than a personal lease. I am paying the same for a 20k per year lease as the 10k personal.

I guess you need to weigh up how much business milage you do. 45p per mile over 10000 miles probably won't cover your repayments.

I recommend getting a personal quote and a company quote and weigh it up.

In terms of tax efficiency the company route is by far the best way at the moment. It's also good to pay a big chunk up front as you can offset the first year 100%.

Just my views. . I am not a financial adviser. . Just careful and efficient with my money..

Happy buying.. neil

Thanks Neil, when you say offset the first year, against what, corporation tax?

Plus why a big chunk? Can't you offset with no large initial payment?

 

[noakey]

Hi there,

I have an i3 coming in a couple of weeks and I'm still not totally clear on which way to finance the i3.

I have a LTD company so plan to use the benefits that brings with it regarding cars in the UK

The two options, as stated in the subject, are:-

1. Buy privately and claim 45p a mile (for first 10000 miles, which I hope I don't exceed as that's my milage limit with BMW anyway)

Or

2. Buy through the company and claim money back through money off corporation tax payments.

I tried speaking to BMW but they don't seem to know which would be most tax efficient, I wonder if I can pick some brains of people to get some insight of which way to go?

Thanks

Hi.. I have done a 3 year lease through my limited company. It's cheaper than a personal lease. I am paying the same for a 20k per year lease as the 10k personal.

I guess you need to weigh up how much business milage you do. 45p per mile over 10000 miles probably won't cover your repayments.

I recommend getting a personal quote and a company quote and weigh it up.

In terms of tax efficiency the company route is by far the best way at the moment. It's also good to pay a big chunk up front as you can offset the first year 100%.

Just my views. . I am not a financial adviser. . Just careful and efficient with my money..

Happy buying.. neil

Thanks Neil, when you say offset the first year, against what, corporation tax?

Plus why a big chunk? Can't you offset with no large initial payment?

Hi.. yes you can subtract the first year costs from your profit and hence pay less Corp tax.. I think you can only do this as 100% of costs for the first year of ownership..

Best talk to your accountant too.. neil

 

[BoMW]

I'm also due to take delivery of my i3 in the next 2 weeks and decided months ago how to finance it even though it might not be the right way to do it.

I know that my LTD company will have a one off, large income stream this financial year so I've decided to purchase the i3 outright through the company, benefiting from the full i3 costs being off set against my income in the first year.
I am also considering claiming the VAT back, as I shall be using the i3 for business use only. My accountant however is yet to be convinced that HMRC will allow this!
In year two possibly year three, I was thinking of buying the car from the company where I could then claim the mileage allowances for business use but also have it for personal use. There would be a VAT element to pay on top of the purchase price of course.

I've also thought about carrying wrap advertising which could generate income of £1000+/ year.

 

[noakey]

I'm also due to take delivery of my i3 in the next 2 weeks and decided months ago how to finance it even though it might not be the right way to do it.

I know that my LTD company will have a one off, large income stream this financial year so I've decided to purchase the i3 outright through the company, benefiting from the full i3 costs being off set against my income in the first year.
I am also considering claiming the VAT back, as I shall be using the i3 for business use only. My accountant however is yet to be convinced that HMRC will allow this!
In year two possibly year three, I was thinking of buying the car from the company where I could then claim the mileage allowances for business use but also have it for personal use. There would be a VAT element to pay on top of the purchase price of course.

I've also thought about carrying wrap advertising which could generate income of £1000+/ year.

Hi... Thats a good plan... personally I have decided to lease as we are trail blazers... after 3 years I will re-think and start again.. probably with a purchase..

Hey mine is waiting shipping from Germany too..

Neil

 

[Dunkster]

Hi,

I'm in a similar position but decided to buy my i3 outright through my limited company. It was this article that swayed me. I posted under a different heading back in January, but the taxation position for BIK has changed slightly from 2015 in the last budget.

http://www.myersclark.co.uk/sites/www.myersclark.co.uk/files/tax%20benefit%20of%20an%20electric%20car.pdf

Dunkster

 

[logorrhoea]

I am also considering claiming the VAT back, as I shall be using the i3 for business use only. My accountant however is yet to be convinced that HMRC will allow this!

Unless you need to car to carry out business (as opposed to travel on business), eg you're a driving instructor or a taxi driver, you can't claim the VAT back. http://www.hmrc.gov.uk/vat/managing/reclaiming/motoring.htm

If you lease the car, you can claim half the VAT back. For maintenance costs, you can claim 100% of the VAT back. My quote from BMW for a company car lease showed this, albeit if you didn't know what to look for you'd wonder why only half the VAT was showing for the lease bit.

 

[BoMW]

I am also considering claiming the VAT back, as I shall be using the i3 for business use only. My accountant however is yet to be convinced that HMRC will allow this!

Unless you need to car to carry out business (as opposed to travel on business), eg you're a driving instructor or a taxi driver, you can't claim the VAT back.

Indeed but then if you read lower down about reclaiming VAT back there is this statement

Reclaiming VAT when you buy a car
Generally you can't reclaim the VAT when you buy, import, or in some other way acquire a car. But there are some exceptions to this. You can reclaim all of the VAT if you meet one of these conditions:
The car will be used exclusively for business purposes and you can show that it's not available for private use by your employees or anyone else. For example, your employees' contract of employment excludes private use including travel from home to the place of work.