Another newbie - sizing & tax

[slammer]

Hello Teslians,


First off, I'm currently purely a wannabe but have been following Musk and his companies for many years.


I'm not a 'green' person whatsoever (in fact, the quicker we kill this planet the faster we will be motivated to get off it, but Elon Musk is working on that too), however as a IT-person I am very impressed with Tesla's continual car and software upgrade cycles, the cars LOOK yummy and the features even more so which is unfortunate for my man-(musthave)-genes.


With my intent covered, let me move on to current circumstances - I've been mostly a Mercedes driver the last 10 years (C-class then E-class) - currently I am about 1.25 years into a 3 year lease for the current E-class I am in so I have "plenty of time". My commute to work and back is about 60 miles (EV potential!) round-trip daily to London, on the motorway (Autopilot!). I am 6ft tall and very-very (read: too) wide framed.


Moving on to finances - I was always under the impression that Tesla's were way out of my financial reach, but upon re-realising that the £650/odd-pm that my E-class is costing me I can nearly be in a base Model-S with some extras (man calculations!). I also started my own limited company that I contract work/through less than a year ago and it might open up more options longer term. I am also admittedly one of those men-folk who absolutely have to avoid dealerships (and especially test driving) at ALL costs possible as I will like what I drive immediately and will no doubt kill all my savings/ccards on the spot to "get it now", so I am trying to avoid those shops/displays as much as I can until it makes sense to make the jump.


So (finally) here's my two questions -


1 - Are there any BigGuy's here who can comment on the Model S driver space compared to other cars (of course preferably a Mercedes). I know my knees would be around my head for a roadster, and I assume whatever the answer is that the Model X would give slightly more space whilst presumably the Model 3 would be a bit more cramped (since the speculation is it is about Mercedes Model C sized) but since only the Model S is a practical comparison right now I'm keen to hear. I understand that the head-space around the back seats are not fantastic and that a sunroof is probably a good option for taller types - but regardless, I'm keen to hear what larger people have to say whilst I am actively avoiding climbing into a Tesla for the sake of my wallet


2 - More a question for my accountant, however I would like to hear from those of you who are putting their car through their limited companies. As a IT person my job does not require travel or a car for that matter (I just don't like public transport so I drive), so I'm concerned about any 'company car' through the company, other than the obvious vat saving, are there any other benefits in putting it through your limited company that I am not realising yet? Also, how many filing-years do you suspect the company would need to qualify financing it through the company? (I am assuming at least two years).


Regardless of the answers, thanks for this community, I already learned quite a lot from just trawling the forums!

 

[WannabeOwner]

I was always under the impression that Tesla's were way out of my financial reach, but upon re-realising that the £650/odd-pm that my E-class is costing me I can nearly be in a base Model-S with some extras (man calculations!)

By my Man Maths I save (Electricity vs. Petrol/Diesel) £ 100 per month for each 10,000 miles I do p.a. and my annual mileage is 25K .. so that's £ 250 per month which I can add to the finance, which gets me a lot more EV car. (Assumptions: commute is short enough that I can charge at-work during the week and only need to charge at-home at weekend / occasionally - that's a great UK perk with no benefit-in-kind tax (that I have detected so far). I also have Economy-7 rates for night-time charging at home)

I also started my own limited company that I contract work/through less than a year ago and it might open up more options longer term

100% first-year tax write off for EV at present, if it was to be a company purchase. That is tapering off (e.g. if you wait 1.5 years for current finance to finish), as is the Benefit-in-Kind tax which is currently lower for EV, and thus currently similar like-for-like with a lower sticker-price non-EV car.

I'm concerned about any 'company car' through the company

I'm not qualified to answer, so the following needs checking.

I don't think mileage matters, you pay benefit-in-kind tax regardless (maybe not if you are a high-mileage sales-rep, or if you are driving a company van kept at company premises, not your home, overnight). Thus I don't think it matters that you have a company car but do low business mileage.

I have seen "claim everything and pay for private mileage" (which gets the VAT back on business mileage), and "company pays for car, user pays for fuel" (which is what my wife does) in which case no VAT claw back (I'm pretty sure she does not claim fuel for business mileage, but I may be wrong on that -or maybe "she should do, but doesn't"). In her case the company buying an EV means that she saves the personal fuel cost (Electricity vs. Petrol) and the company pays the higher Finance cost per-month (e.g. Model-S vs. Golf or whatever). There is also the opportunity to "re-fuel" the car using company's electricity when at work (and the business may get some sort of relief from local council for a green-initiative of encouraging EV ownership amongst staff).

Sounds like your commute, alone, is 13-15K p.a. and which you are currently paying for out of your own pocket, so a company EV purchase would save you personally £100-150 per month ...

The 100% first-year write off would be the biggest benefit I think (in terms of cash flow, its probably not a tangible saving over the lifetime of the vehicle) for a company purchase. I have seen folk here proposing to have company finance the vehicle for the first few years, then make a private purchase from the company. This would avoid the increasing benefit-in-kind tax as the current discount rate tapers off, and would pass the car from company to individual taking advantage of the highest depreciation rate.

I also see a number of people (myself included) assuming that they will own EV for longer than an ICE. So few moving parts, by comparison, that it is likely that the car will have a longer life. We changed ICE cars at 3 years (3 x 25K = 75K miles) as we felt that beyond that they started to become troublesome mechanically. Might well be that EV lifetime is much, much longer. There again, technology leap-frogging may mean you want to upgrade, but you could consider finance over mre years than your would have done for ICE previously.

My advice (contrary to what you wrote ) would be to go get yourself a test drive. It isn't the high pressure sale common in dealerships - Tesla staff are not on commission, and are not trying to flog you options that you don't need etc. The vehicle is a new concept for most people, they are expecting prospects to need several test drives to make a purchasing decision - so if you need to look for an excuse then hide behind that one. "I need to bring my wife for a look" would also work; mine was "I'm testing it on behalf of my wife who is far too busy to come in person the first time"

Alternative is to ask here if there is someone near you who would take you out for a ride. I did that and ARG very kindly took me for a drive, which saved the time of going to Heathrow. Good opportunity to look at the car close up, talk to someone who has day-to-day experience, and to check if the seats are comfortable

 

[slammer]

Thanks WannabeOwner for your thoughts, appreciated!

By my Man Maths I save (Electricity vs. Petrol/Diesel) £ 100 per month for each 10,000 miles I do p.a. and my annual mileage is 25K .. so that's £ 250 per month which I can add to the finance, which gets me a lot more EV car. (Assumptions: commute is short enough that I can charge at-work during the week and only need to charge at-home at weekend / occasionally - that's a great UK perk with no benefit-in-kind tax (that I have detected so far). I also have Economy-7 rates for night-time charging at home)

I do like that ManMaths - certainly the savings should go into the options

I have seen "claim everything and pay for private mileage" (which gets the VAT back on business mileage), and "company pays for car, user pays for fuel" (which is what my wife does) in which case no VAT claw back (I'm pretty sure she does not claim fuel for business mileage, but I may be wrong on that -or maybe "she should do, but doesn't"). In her case the company buying an EV means that she saves the personal fuel cost (Electricity vs. Petrol) and the company pays the higher Finance cost per-month (e.g. Model-S vs. Golf or whatever). There is also the opportunity to "re-fuel" the car using company's electricity when at work (and the business may get some sort of relief from local council for a green-initiative of encouraging EV ownership amongst staff).

Sounds like your commute, alone, is 13-15K p.a. and which you are currently paying for out of your own pocket, so a company EV purchase would save you personally £100-150 per month ...

The 100% first-year write off would be the biggest benefit I think (in terms of cash flow, its probably not a tangible saving over the lifetime of the vehicle) for a company purchase. I have seen folk here proposing to have company finance the vehicle for the first few years, then make a private purchase from the company. This would avoid the increasing benefit-in-kind tax as the current discount rate tapers off, and would pass the car from company to individual taking advantage of the highest depreciation rate.

Thanks a ton for this, from what I've read it seems like quite a few people go for the 'company buys the car, I pay the "fuel"' method, your maths are not too far off from mine as well, figured around a £125/pm saving. With that said, I think I have more than enough information to badger my accountant with to work out whichever way and structure is most beneficial.

I also see a number of people (myself included) assuming that they will own EV for longer than an ICE. So few moving parts, by comparison, that it is likely that the car will have a longer life. We changed ICE cars at 3 years (3 x 25K = 75K miles) as we felt that beyond that they started to become troublesome mechanically. Might well be that EV lifetime is much, much longer. There again, technology leap-frogging may mean you want to upgrade, but you could consider finance over mre years than your would have done for ICE previously.

That is a very good point, much the same here, we change ICE cars at 36 months, in most recent years as PCP/HP/etc became more commonplace it has been a good way to 'get into something new' every 3 years and before something mechanically expensive wears down. Cars are very much seen by us as consumables and not assets and is budgeted as such. Naturally, Tesla's constant evolution and software upgrades put a big question-mark. I was automatically going to go for the PCP deal, however your points are all very true. So just more to think about then - the resale-value being guarenteed is another interesting curve-ball to add, but enough said

My advice (contrary to what you wrote ) would be to go get yourself a test drive. It isn't the high pressure sale common in dealerships - Tesla staff are not on commission, and are not trying to flog you options that you don't need etc. The vehicle is a new concept for most people, they are expecting prospects to need several test drives to make a purchasing decision - so if you need to look for an excuse then hide behind that one. "I need to bring my wife for a look" would also work; mine was "I'm testing it on behalf of my wife who is far too busy to come in person the first time"

Alternative is to ask here if there is someone near you who would take you out for a ride. I did that and ARG very kindly took me for a drive, which saved the time of going to Heathrow. Good opportunity to look at the car close up, talk to someone who has day-to-day experience, and to check if the seats are comfortable

Hehe, the problem is my wife will come with and no way to let her not go with me (I might even admit she is even more car passionate than I am) - typically the pressurized car salesman is absolutely nothing compared to your partner saying 'i love this! lets get it now!' throwing all rational thought out of the window

Again you make a good point though - I frequently see a 65 reg Model S parked around one of the Canary Wharf carparks I might slip a note to / stalk or a friendly forum member but I am still very concerned that my rationality will go out of the window that same minute (it happens every time) so will probably savior that thought until I need to act on my current lease expiration - if I wait long enough maybe the Model X would be a option eventually (I tell myself).

Psychological trauma aside, the Model S as they say is justifiably a very big car and seems more comparable to a Mercedes S class than E in size from what I could find online my half-made table shows:

Description (mm)	Mercedes E Saloon (2015)	Model S
Wheelbase	2874	2960
Length	4879	4970
Width	2071	2187
Width (mirrors folded in)	1854	1964
Track Front		1662
Track Rear		1700
Clearance	123	144
Air Suspension		120-163
Head room front	962	986
Head room rear	970	897
Leg room front	1049	1083
Leg room rear	909	900
Shoulder room front	1374-1452	1465
Shoulder room rear		1396
Hip room front		986
Hip room rear		1390

From the above it seems like I should be more concerned about the 2m wide garage door as it gives little clearance

Thanks for your guidance, really appreciated!

 

[tfboy]

Unfortunately, even if you're VAT registered, (I'm in the same boat as you and also work in Broadcast / IT), you can not recover the VAT. In order to be able to claim the VAT back from a company car, you primary business role needs to be the car. So driving instructor or taxi / chauffeur. Anything else, even if it's used for business use, does not qualify.

However, you can get 20% back by writing it off against your corporation tax. I've been through the same process and asked my accountant the same questions

If you don't make sufficient money in the first year to write it off, you don't "lose" anything, you start the next year(s) with a negative profit so the benefits of CT are carried over.

When it comes to claiming mileage, you cannot apparently - no precedent has been set yet as EVs are relatively new - claim the 45p/mile. You can of course claim the electricity cost, but how you justify it could be a bit tricky (no seperate meter for just the car charging bit).

 

[slammer]

Unfortunately, even if you're VAT registered, (I'm in the same boat as you and also work in Broadcast / IT), you can not recover the VAT. In order to be able to claim the VAT back from a company car, you primary business role needs to be the car. So driving instructor or taxi / chauffeur. Anything else, even if it's used for business use, does not qualify.

Thanks for your response tfboy, yup I fully expected that one as it's the same for ICE cars currently - clearly we need to change jobs, be a Uber LUX driver or maybe park the car somewhere and use it as your office (3G right? ).

However, you can get 20% back by writing it off against your corporation tax. I've been through the same process and asked my accountant the same questions

If you don't make sufficient money in the first year to write it off, you don't "lose" anything, you start the next year(s) with a negative profit so the benefits of CT are carried over.

Thanks! Glad someone else is asking the same questions I was not aware that I can't "lose" anything and that it carried over, so timing matters much less then, brilliant.

When it comes to claiming mileage, you cannot apparently - no precedent has been set yet as EVs are relatively new - claim the 45p/mile. You can of course claim the electricity cost, but how you justify it could be a bit tricky (no separate meter for just the car charging bit).

Thanks for confirming, I did suspect the 45p/mile would effectively still "count". I suspect the electricity cost is negligible enough not to be of any concern over a year for these purposes but will be interesting to see where HMRC goes with that.

I guess the only other item then is to figure out when it would be realistic for a new limited company to apply for finance (assuming PCP for now with a large deposit), I'm not concerned if it is the obvious credit check of the directors (just me) but obviously the company is new, etc etc - a wait seems worth 20% "off".

Thanks again!

 

[DJP31]

When it comes to claiming mileage, you cannot apparently - no precedent has been set yet as EVs are relatively new - claim the 45p/mile. You can of course claim the electricity cost, but how you justify it could be a bit tricky (no seperate meter for just the car charging bit).

If the car is owned by the individual he can claim the 45p per mile. How the car is powered is not relevant, it is the fact it is the individuals car that is being used for business travel. The figure is supposedly arrived at to cover the whole cost of the car, not the fuel used. It's 45p for first 10k miles then 25p thereafter. Commuting to a place of work does not count.

 

[pbceng]

I can't comment on the benefits relating to company car purchase because I bought my Model S as a personal purchase. I wanted to go for a full BEV and seriously considered the Merc B Class Electric and the Nissan Leaf, however the dealer experience with the former was terrible and after I found it couldn't fast charger I dropped the B Class as an option. The Leaf I quite liked, a bit odd looking but then I've had two Prius's over the last 9 years so I could live with that. The real killer for me was the range even with the new 30kW version and I couldn't convince myself that the extra time hanging around charging would work when travelling on business. That drew me to consider the Model S which I'd previously discounted on cost - some man maths convinced me that I could afford to buy one and assuming I kept it for 5 years it actually made some sense. I had been very disappointed in my last Prius (a plug in) particularly with long distance driving and was looking for something more fun and comfortable.

It was after working out I could but one that I went on spec for a test drive. I would strongly support your position of not test driving until you're fairly sure because I was totally blown away by the car. It is a large car both in width and length but compared to a Merc E class it somehow feels smaller and much more nimble. I arranged to go back for a longer test drive including motorways a few days later in a base spec car (70, coil suspension, virtually no options etc) and that was it, I ordered one within 24 hours!

In my own car I went with the coil springs, no sunroof and the standard leather seats. I did consider the next gen seats but they have much bigger side bolsters and I thought it might be more awkward for my wife (who has limited mobility) to get in and out of the car. For those of a wider frame I suspect the same would apply and the standard seats would be preferable. The car is very comfortable indeed, I've spent over 5 hours in a day in the driving seat several times now and get out far fresher than I would expect. I have also noticed that I'm not getting the driver fatigue symptoms I had with my last Prius. The size has so far not bothered me at all apart from a couple of very tight side roads and one width restriction but it does need to be taken into consideration. I'm not sure whether the air suspension might have been a good option to have, the coil one is fairly hard and on poor roads can be rather jiggly - I suspect air might damp this out better - but it's not enough to give me any real regrets.

Overall impression after 2 months and 5,500 mile is that this is far and away the best car I have ever driven including Mercs, Jaguars, Range Rovers BMWs etc. My previous dream car was an Aston Martin DB9, but this has replaced it totally in my affections. The Tesla grin is a real phenomenon!

 

[tfboy]

If the car is owned by the individual he can claim the 45p per mile. How the car is powered is not relevant, it is the fact it is the individuals car that is being used for business travel. The figure is supposedly arrived at to cover the whole cost of the car, not the fuel used. It's 45p for first 10k miles then 25p thereafter. Commuting to a place of work does not count.

Sorry, I should have clarified my post. Of course, if you buy it as a company car, then as it's not your personal car, the mileage allowance is different anyways. This page on HMRC's website attempts to detail it, and they cover hybrid cars, but no fully EV ones, so not sure what one's meant to do with a Model S, Leaf, etc. I'll seek to clarify that with my accountant.

 

[slammer]

I would strongly support your position of not test driving until you're fairly sure because I was totally blown away by the car. It is a large car both in width and length but compared to a Merc E class it somehow feels smaller and much more nimble. I arranged to go back for a longer test drive including motorways a few days later in a base spec car (70, coil suspension, virtually no options etc) and that was it, I ordered one within 24 hours!

Thank you - I saw 3 MS's on Saturday as it is (maybe I should not have checked out the superchargers at Oxford services) and it's enough to contend with *grin*.

In my own car I went with the coil springs, no sunroof and the standard leather seats. I did consider the next gen seats but they have much bigger side bolsters and I thought it might be more awkward for my wife (who has limited mobility) to get in and out of the car. For those of a wider frame I suspect the same would apply and the standard seats would be preferable. The car is very comfortable indeed, I've spent over 5 hours in a day in the driving seat several times now and get out far fresher than I would expect. I have also noticed that I'm not getting the driver fatigue symptoms I had with my last Prius. The size has so far not bothered me at all apart from a couple of very tight side roads and one width restriction but it does need to be taken into consideration. I'm not sure whether the air suspension might have been a good option to have, the coil one is fairly hard and on poor roads can be rather jiggly - I suspect air might damp this out better - but it's not enough to give me any real regrets.

Overall impression after 2 months and 5,500 mile is that this is far and away the best car I have ever driven including Mercs, Jaguars, Range Rovers BMWs etc. My previous dream car was an Aston Martin DB9, but this has replaced it totally in my affections. The Tesla grin is a real phenomenon!

Thanks, that is very informative, especially the seats. It's my understanding that the sunroof adds a bit of headroom?
My dream car was also always the DB9 but I don't know so much anymore

Out of interest (separating technology and car sizing) what's the major contributor to having less fatigue? Autopilot alone?

Thanks again, appreciated!