Limited company purchase

[sole1517]

VAT and CT are two different questions and treatments.

Purchasing:
100% FYA which means the full cost is charged as an expense, reducing your profits and therefore CT.
Example, £100k profit, minus £60k Tesla, equals £40k profit. 40k @ 19% = £7,600 CT as opposed to 100k @ 19% = £19k, saving £11,400.
So your Tesla costs £60k minus £11,400 = £48,600 BUT
When you sell the car, you book the sale price as a profit and pay the prevailing CT (which will be higher now)

VAT - You can reclaim 100% if business use only, or nothing if it is available for personal use.

Leasing:
Lease costs are a business expense.

VAT - You can reclaim in full if business use only. or half the VAT if it is available for personal use.

Thank you for your reply. That's nice and clear. That's the numbers that I worked out properly on a spreadsheet. Duly noted it you sell.

Leasing after 4 years for example you then have £0 to show for it because the car has gone back. I normally lease.

For the VAT aspect, as it'll be 100% business. It'll be reclaiming 20% VAT of the 60k.

So rough total numbers. That would be;

60k - VAT (£10,000) = £50,000

60k - CT (£11,400) = £48,600

Potential cost > £60,000 - £10,000 (VAT) - £11,400 (CT) = £38,600 ?

Would that be right ?

Thanks.

 

[HonchoNI]

I thought I would post this question on this thread as it seems to include related expenses. If purchasing a car using the same method here are any electricity costs, home charger costs, or home solar setups to charge the car claimable if you work from home?

 

[T-Lo]

I thought I would post this question on this thread as it seems to include related expenses. If purchasing a car using the same method here are any electricity costs, home charger costs, or home solar setups to charge the car claimable if you work from home?

I'm just about to order through my ltd co and have spoken to account on the above this week.

Home charger + installation can be expensed through company, along with a percentage of home electricity bill providing you can prove and document the business miles.

The electricity bit sounded like a hassle to me.

Maintenance and insurance can also be expensed I was told.

 

[Rooster6655]

If purchasing a car using the same method here are any electricity costs, home charger costs, or home solar setups to charge the car claimable if you work from home?

To claim costs for charging at home you just need to keep a log of the amount of energy charged from home and then calculate the cost, either from the charger or stats software

 

[WannabeOwner]

claimable if you work from home?

In case of interest to anyone

I've been working from home "forever". As such I had a percentage of electricity allowed for "office use" (separate issue from car charging). When we installed solar panels that reduced the amount of my electricity bill - Accountant offset the same percentage against the capital cost of the solar panels (and that remains on the grid-portion that I still pay for)

Technically the Company owns that, and if house was sold there would be tax to pay

 

[Jackstini]

Just wanted to say thanks to posters on here as planning to buy an MY through my Ltd co - some really clear and useful info

Ideally, I want to delay delivery to after 01 April, as I have not made enough profit in 22/23 to make it worthwhile offsetting the VAT or CT
Deliveries still showing as Jan-Mar if I order now so am hanging on
Or if I take delivery before April can I 'bank' the expense against next tax year? Was not sure as it is a '100% First Year' thing

 

[ringi]

It unlikely you can reclaim the vat when buying a EV unless you are a taxi company, or can prove there will never be any private use of the car.

There are ways to take corp tax losses forward so you can offset them against the next year profits. Check with your accountant as it depends on the details of your trading.

 

[btc1k]

Just wanted to say thanks to posters on here as planning to buy an MY through my Ltd co - some really clear and useful info

Ideally, I want to delay delivery to after 01 April, as I have not made enough profit in 22/23 to make it worthwhile offsetting the VAT or CT
Deliveries still showing as Jan-Mar if I order now so am hanging on
Or if I take delivery before April can I 'bank' the expense against next tax year? Was not sure as it is a '100% First Year' thing

It is not necessary to claim the 100% first-year allowance where the expenditure qualifies for it – a writing down allowance may be claimed instead if this is beneficial, for example, if claiming the first-year allowance would result in a loss. It is also possible to claim less than the full 100%, thereby tailoring the claim to achieve the best result.

When you get into the nitty gritty of it - you need to speak to your accountant.

 

[btc1k]

It unlikely you can reclaim the vat when buying a EV unless you are a taxi company, or can prove there will never be any private use of the car.

There are ways to take corp tax losses forward so you can offset them against the next year profits. Check with your accountant as it depends on the details of your trading.

Very true. I am a director of a company where we have reclaimed the full VAT on cars but they are pool cars, not to be taken home, etc.

HMRC say that even if the car is "available" for private use, then it is VAT blocked. "Available" is quite a wide remit!

 

[Rooster6655]

Ideally, I want to delay delivery to after 01 April, as I have not made enough profit in 22/23 to make it worthwhile offsetting the VAT or CT
Deliveries still showing as Jan-Mar if I order now so am hanging on
Or if I take delivery before April can I 'bank' the expense against next tax year? Was not sure as it is a '100% First Year' thing

In most cases you can get a CT refund or as you say carry the losses forward but best to get an accountant to confirm this and it also takes a long time to get HMRC to pay up!

 

[ringi]

I would choose to carry losse forward rather then ask for a CT refund as HMRC asking questions will increase accountant bills.