WannabeOwner
Well-Known Member
75 model went away ... and came back as "short range" a month or two later ...
But of course anything could happen this time
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LTD company too good to be true?
- Thread starter Jmad
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75 model went away ... and came back as "short range" a month or two later ...
But of course anything could happen this time
Rooster6655
Active Member
Jason71
Well-Known Member
Ultimately that does not save you any tax though just moves when you pay it from upfront with gradual rebates to when you sell the car.
How much value that has depends on how much cash you have and what you do with the upfront saving.
Rooster6655
Active Member
Well if you buy it used from Tesla you would get a 4 year warranty (if under 50k miles) and free supercharging (most cars) and possibly cheaper insurance vs the model 3 (right now), as you can't claim 100% write down the first year though it maybe worth considering buying it personally and charging miles to the company @40p if that fits yous situation.
Buying a new model 3 would allow you the 100% write down allowing you to use that money elsewhere so this may work and with the updated tech vs the S it makes a lot of sense unless you really need the space in a bigger car
Rooster6655
Active Member
Well it does save you tax as the car depreciates over time so when you come to sell the car there would be less of a value that you would need to pay tax one, so at 20-25% depreciation per year it will soon mount up over 5 years.
It works better for sole director companies that have a excess cash that they want to utilise in the most tax efficient way.
WannabeOwner
Well-Known Member
But you get that normally (as depreciation accounted for annually in the Books). So, as I see it, the only benefit is the "use of the money", at the end you wind up evens-ish - i.e. the difference between deprecating the asset each year, or "100% capital allowance" in year one and then sale-price (profit) in final year
And you have to wait for year-end to actually have any actual additional-money [actually "less tax"] (unless you buy day-before year end and sell day-after another year end
) and you have to be making a profit ... and it is only the corporation tax on the purchase price which is saved ...I'm not knocking it, I put that money to use - my Man Maths was "Pay £20K-ish finance over 3 years or pay cash and have £20K-ish freebie-loan"
The benefit for a higher-tax-bracket director may be a much more significant reason to do it. Low/No BiK on company car also moves running costs to the company - e.g. insurance for a 17 year old learning to drive, accessories (bit of a grey area on Capital/Expense) ... e.g. a set of Winter-tyres ... and rims
...
Rooster6655
Active Member
Yes you get it normally compared to any other asset so in that respect its not an advantage for an EV purchase, so the 100% write down is most beneficial if you can use the money during the period.
So I get a New Electric is the preferred option from a write down perspective 100% but does it still not make sense to buy a Users Electric Model S?
Don't I still benefit from the write down but at a reduced rate each user and zero BIK after April 2020.
I guess what I am saying is I want a Model S over the 3 but seems the New route is better....
Don't I still benefit from the write down but at a reduced rate each user and zero BIK after April 2020.
I guess what I am saying is I want a Model S over the 3 but seems the New route is better....
Rooster6655
Active Member
If you want an S then you will still benefit from the BIK, there are some good option on the Tesla website for a used S and I expect by Sept a fair few trade ins as the used section seems to be getting busy recently
Jason71
Well-Known Member
We don't know your company financial statement. ultimately you will pay the same amount of corporation tax either way. The difference is M3: Pay the right amount when the company sells the car
MS: Pay too much upfront then get a small amount back every year (18%) until you sell it then if you have still over paid get the rest back when you sell it.
So it depends whether having the roughly 10K of cash we are talking about in your companies bank account while you own the car rather than having some of it in HMRC's is important to you. ultimately when you sell the car the overall tax bill will be the same either way and it will end up being 20% of what you sell the car for.
whether this is enough to shape your purchase only you can know.
The BIK is the same either way
Thanks everyone. So I am clear on this. If I go for a Model 3 with Performance and Full Self Drive 56k and my corp tax is currently 15k to HMRC then does that reduce this year corp tax bill considerably? Also is the write down the list price and options even with a PCP in my Limited company name?
I am really in two minds over the 3 and the S, the S also having free use of Tesla supercharging network but the 3 has the latest in Auto Pilot and self drive coming!!!
I am really in two minds over the 3 and the S, the S also having free use of Tesla supercharging network but the 3 has the latest in Auto Pilot and self drive coming!!!
Something to consider (certainly this year, less so from next April) is that BIK is worked out on the list price of the car - so the older the car is, the more tax you pay relative to your actual purchase price. i.e. BIK is the same on a car that cost 70k 5 years ago that you bought for 20k as it is on a car you buy new today for 70k.
This was something that caught out at least one other person on here when they got a "great deal" on an inventory P100D just after the massive price drop. The car was discounted by ~50k to bring it in line with the price of the new Ludicrous Performance S, but that discount doesn't help with BIK as it would be charged against the list price of the P100D at ~£135k. So he would have had to pay significantly more tax this year on that car than if he ordered a custom build of essentially the same car and waited for it to be delivered.
This in conjunction with 100% FYA makes new often the sensible choice for a company car.
Jason71
Well-Known Member
Yes very good point. with a 0-2% BIK for the next 3 years it won't actually make much difference after April but it is an important point to remember
Jason71
Well-Known Member
The writedown is whatever you spend on the car so yes it includes the options, delivery fee number plates etc. i.e. the total bill from Tesla
Yes it would reduce your corporation tax bill by £56,000*20% so to £3800 but that is based on paying cash out of company profits cos if you spend it it's not profit so no tax to pay. But this only applies if paying cash.
You cannot write down 100% of the value of the car in the first year if you lease it or use PCP. Since you have not actually spent the money. At the end of the first year you have only spent whatever the deposit was and the first years payments so that is the max you could write off in the first year and I am not sure if any restrictions apply there. Eventually everything you have spent will be able to be off set but only in the year you spend it. Exactly when you can offset when I don't know.
Jason71
Well-Known Member
0% 2020-21
1% 2021-22
2% 2022-23
there is no standard P11D price it will be the list price at the time it is/was first sold ,+ options+ delivery charge. Given how volatile Teslas prices are that could vary by quite a bit car to car!
Thanks that makes sense now and kind of puts a Used Tesla back on the cards as either New or Used would be a PCP or HP.
Thanks I don't see there being much in it as the BIK is no more than 2 percent in 2022. I guess we don't know what 2023 on looks like yet.
Jason71
Well-Known Member
Nope.
I'd like to think the plan is to keep it pretty low for a while but I saw a survey where 70% of respondents said that they would like to switch their company car to an EV due to the low BIK rates. If the real number who switch in the next 3 years is anything like that It will cost the government billions in lost company car tax, VED and fuel duty. If that happens these incentives will be gone very quickly.
Quite possibly but we don't have a crystal ball so I'm 100% going EV for my next car. So another reason to go for a Used Tesla S pre 2017 is not only free use of the Tesla charging network but also avoid the Luxury VED introduced this year for cars registered after April 2017 that were over £40k.
My mind is almost set on a Used Model S so I am going to take a look at a couple Friday at a CarShop then look to buy one on a PCP from Tesla. Thoughts on which one. P85D or 85D is fine? I've been sent some details from Tesla on a couple of used ones if anyone wants to throw their opinions in as I have no experience with Tesla full stop.
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