LTD company too good to be true?

[Rooster6655]

You cannot write down 100% of the value of the car in the first year if you lease it or use PCP.

You can’t write it down if it’s a lease 100% in the first year but quite sure with PCP you can write down the full cash price at the outset less finance fees.

I have checked with an accountant before about this

PCP Car purchase

 

[WannabeOwner]

I've been sent some details from Tesla on a couple of used ones

If you aren't familiar with it this list is worth a look - he scrapes all sorts of sites to gather the data for available second hand vehicles, and keeps a note of price as it changes / the car comes onto the market again

Tesla UK new and used car prices

 

[6502]

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.

Having now twigged how significant this is (and consequently my Ltd company has just bought a Model3), I'm sure there will be huge company car demand. But isn't that the government's aim to get electric cars into the company fleet and trickling out to private buyers in 3 years time? They have committed themselves to a serious move to zero-emission transport.
In any event it's not a problem if the 23-24 BiK rate zooms up. The game will be over, but I'll buy the Model 3 off the company and revert to private ownership from that point on. And the bulk of the depreciation will have happened in company ownership with pre-tax money.

 

[richyrich77]

That's really interesting. Thanks

 

[Jason71]

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.

the luxury car tax is annoying but in the end its just another cost i.e £320 per year in years 2 -6 (if you keep it that long) which is not that much in the great scheme of things. The increase in BIK on the S due to the higher list price probably pretty much balances that out (except in the 0% 2020 year) so the choice of car would have to be very finely balanced to make that the deciding factor.

 

[Jason71]

Having now twigged how significant this is (and consequently my Ltd company has just bought a Model3), I'm sure there will be huge company car demand. But isn't that the government's aim to get electric cars into the company fleet and trickling out to private buyers in 3 years time? They have committed themselves to a serious move to zero-emission transport.
In any event it's not a problem if the 23-24 BiK rate zooms up. The game will be over, but I'll buy the Model 3 off the company and revert to private ownership from that point on. And the bulk of the depreciation will have happened in company ownership with pre-tax money.

yes I think you are right both in your plan for your car, I am considering similar, and in the fact that the incentives are to get the cars out there. but it all costs money and they must have a view on how much they are expecting / prepared to spend and I doubt it equates to the tax take on 70% of the company car market. so in the (very unlikely) event that the fleet news poll is correct I could see the low BIK not hanging around too long.
Once EV's are established there will need to be new taxes of some sort, the lost of revenue from fuel duty will have to be replaced somehow (road pricing?) but speculating on that is probably one for a new thread .

 

[m3gt2]

So I am a sole trader (private hire/chauffeur) and not VAT registered. My partner is VaT registered. I'm hoping to change my Audi A8 for a Tesla shortly but an in a quandary reading this. Would I be better getting my partner to buy one and claim the VAT back and rent it to me, buy it myself as a company asset or buy it as a personal vehicle and charge my business the mileage?

 

[Rooster6655]

So I am a sole trader (private hire/chauffeur) and not VAT registered. My partner is VaT registered. I'm hoping to change my Audi A8 for a Tesla shortly but an in a quandary reading this. Would I be better getting my partner to buy one and claim the VAT back and rent it to me, buy it myself as a company asset or buy it as a personal vehicle and charge my business the mileage?

Depends on the business of your partner, if they are using the vehicle solely as a rental vehicle it maybe possible but they would need to rent the vehicle to you including VAT as well.

I don't know how private hire and VAT works, if you were registered and whether you had to charge VAT on fares in that case.

 

[Docro]

So I am a sole trader (private hire/chauffeur) and not VAT registered. My partner is VaT registered. I'm hoping to change my Audi A8 for a Tesla shortly but an in a quandary reading this. Would I be better getting my partner to buy one and claim the VAT back and rent it to me, buy it myself as a company asset or buy it as a personal vehicle and charge my business the mileage?

Can you change your status to be a Limited Company? If your services are VAT exempt then you don’t need to register for VAT but can still write off the full value of the car in year one assuming your profits can cover it. That’s what I did

 

[m3gt2]

The services would be liable for 20% VAT, my partner deals mainly with corporate so the VAT isn't a problem but I do quite a bit of private individuals so I would either be more expensive to them or I would be out of pocket compared to how I am now... very difficult to know for sure which would be best. If my partner was to rent it to me she would need to charge me VAT so that probably wouldn't work.

 

[richyrich77]

Reese

the luxury car tax is annoying but in the end its just another cost i.e £320 per year in years 2 -6 (if you keep it that long) which is not that much in the great scheme of things. The increase in BIK on the S due to the higher list price probably pretty much balances that out (except in the 0% 2020 year) so the choice of car would have to be very finely balanced to make that the deciding factor.

Don't you pay the Luxury Car tax from the start in Year 1 also?

 

[MrBadger]

No. You get a years grace. So those on 2 year finance only pay second year.

 

[Jason71]

Reese


Don't you pay the Luxury Car tax from the start in Year 1 also?

First year VED is structured around CO2 not luxury. Vehicles pay based on their CO2 emissions.
The idea is to discourage people from buying high C02 vehicles in the first place.
EVs are zero C02 so are £0 in the first year.
luxury tax kicks in in year 2 for 5 years

 

[6502]

Claiming the VAT back isn't just a matter of being registered - it seems the car needs to be pretty unambiguously business only. Any private use and you're scuppered.
This appears to be where leasing enters the equation because reclaiming VAT on lease charges is less controversial. (And the car is business only for the lessor, so they can reclaim VAT in full)
Reclaiming VAT
I'm sucking up the VAT - for me the attraction of company ownership is all about corporation tax and personal taxes.

 

[GraemeS]

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.

My understanding were the tax benefits were only applicable on a new car? I bought my MX through my ltd company.

Also to confirm that you can write down 100% with PCP which is what I am doing.

 

[richyrich77]

First year VED is structured around CO2 not luxury. Vehicles pay based on their CO2 emissions.
The idea is to discourage people from buying high C02 vehicles in the first place.
EVs are zero C02 so are £0 in the first year.
luxury tax kicks in in year 2 for 5 years

My understanding were the tax benefits were only applicable on a new car? I bought my MX through my ltd company.

Also to confirm that you can write down 100% with PCP which is what I am doing.

I don't really understand the difference with a new or used in terms of the corp tax. If its new I get its in the first year you get the write down offset against that years corp tax. If its Used its 18% each year. Seems the same in either just upfront with a new.

 

[richyrich77]

I am edging towards a New Model 3 in any case as just not sure on a Used S paying similar money for a 3/4 year old car!

 

[WannabeOwner]

I am edging towards a New Model 3 in any case as just not sure on a Used S paying similar money for a 3/4 year old car!

Model-S is bigger car (that might be a bad thing - e.g. supermarket car parks?), far more "cargo space", and hatchback. Depending on the model the Model-S might be bigger battery / more range (but Consumption on Model-3 is more frugal, so like-for-like (i.e. same price New M3 or Used MS) probably the same)

I think that's about it.

 

[UkNorthampton]

Am buying through company (small ltd company on flat rate vat).

I'm having to lend the company money personally from savings for some of the cost.

Intention is to hold car for a few years and sell at market rate possibly to me or family.

Then get a Model Y if tax is similar.

100% first year allowance write down saves something like 10k (19%) and costs / insurance / VED etc paid from company. Unsure of supercharger costs. I think insurance will be biggest cost. Lr3d awd

As an individual charging at home I can still claim 4p a mile as I understand it.

I am very far from being an expert in this and did look at PCP/business contract hire until my eyeballs bled and brain went on strike. Probably very annoyed accountant! First year allowance limited to buying so hire purchase or cash ok. But seemingly so was another scheme done by octopus (BCP/bch?).

 

[UkNorthampton]

100% first year allowance limited to new cars. Must be in company name at first reg with person as keeper I believe. Check documents.