Business PcP

[alimordecai]

Hi there, I am currently trying to find the best way to finance or purchase a new model y through my ltd company. I am either looking at a business contract hire or the business PCP options. I am not VAT registered so I cant claim back 50% of the VAT. Business PCP looks more attractive but i am unsure if it will be treated as a lease for accounting purposes as until I make the final balloon payment, the company never actually owns the vehicle and I can use the monthly costs as a deduction. After constant emails to an from Tesla they wont actually provide me with a copy of the documents until i commit to purchasing the car in one for or another. Does anybody have experience with this and wouldn't mind sharing the (please anonymise) terms and conditions or their business PCP arrangement. Thank you

 

[btc1k]

Business PCP (BCP), is not treated as a lease. It’s a purchase. 100% FYA.

If you want to deduct monthly costs as an expense, its BCH, business contract hire.

 

[T-Lo]

Business PCP (BCP), is not treated as a lease. It’s a purchase. 100% FYA.

If you want to deduct monthly costs as an expense, its BCH, business contract hire.

Hang on, so if I bought a Model Y through my company on business PCP - let's say £1000 deposit and 36 payments of £800 and a balloon payment at the end, then I can have it as a £44,000 expense in year one?

 

[Zilla91]

Yes. Go speak to your accountant, they should explain how it all works to you.

You get other benefits like putting any car expenses, including public charging away from home, through the business.

 

[WannabeOwner]

then I can have it as a £44,000 expense in year one?

Yes ... but.

You'd need to speak to an accountant rather than trust my description, but you can then offset the Corporation Tax (so some modest percentage of that £44K).

So you have to have been making enough profit to be able to offset that Corporation Tax

And when you sell it then that will be 100% profit ('coz written down to £zero in the books), so you'll have to pay Corporation Tax on that "Profit". And Corporation Tax might be a higher rate at that time ...

... but if you buy another one (for more than you sold the one one for, Natch!), and if this "facility" is still available, then you would just be doing rinse-and-repeat.

Dunno about PCP purchase, mine was cash, but mine is a "company car", so all costs/expenses (including monthly sub, PPF wrap, mats etc. etc.) are all chargeable. If you have a 17 year old sprog about to learn to drive the insurance £££ may very well be the sole reason for doing it.

You have to pay Benefit-in-Kind tax on Company Car, but its tiny (for EV). I have 2x EV as company cars - accountant was relaxed about me having 3 on the company ("You are paying the BiK, that's all the revenue will care about" - clearly for 3x ICE the BiK would be a painful payment, but for EV it aint - currently). I had other reasons for not doing the 3rd car ... but FWIW my accountant was relaxed

 

[T-Lo]

Well that changes things for sure. My ltd co is only 18 months old with one year of accounts submitted this week so likely struggle with PCP, but could potentially throw some cash in as a director loan just to buy through business and draw that back out rather than dividends over the next year.... Food for thought, thanks!

 

[alimordecai]

Its very tax efficient to get an EV in the UK right now and rules and regs are deliberately grey so you can apply them to different circumstances whether it be a finance lease aka purchasing or operating lease. Thanks for the info BTC1k

 

[Callumlj]

I got a Bch through leasing options with one years accounts just had to put 6months payment down