Hello all.. My first post here!
I am keen to get away from my diesel and go electric.. have a wife and 2 kids, age 4 and 8, and will arrange a test drive in the Model 3 soon to check it is big enough for our needs - MX is out of my price range
I did not think I would be able to afford a Tesla just yet, but I’ve been looking into the tax changes for the 2020/21 tax year and it looks very interesting, with 0% BIK applying in that year.
I’m an employee, working for a small company, and am interested in getting my employer to agree a salary sacrifice agreement to get a Model 3.
I’m quite comfortable about impacts to pensions, to ensure these are not negatively affected, so all good there. My employer would also likely chuck his Employer NI savings back into the pot to make savings greater.
I’m a higher rate tax payer, and also currently lose child benefit, so the tax savings could be significant at 40% for income tax, 13.8% employer NI, 2% employee NI and a further ~20% child benefit, so around 75.8% in tax savings as I understand it.
I’m looking at the options and it looks like I could either:
1) Lease
Here, the lease would be through the company for a fixed term, for my benefit… at the end of the lease could I then try and purchase the car?
Most lease companies seem pretty vague around this as an option… Are there any negatives/ tax repercussions of doing this? Any lease companies who offer this as an option (with fixed residual price perhaps?)
The biggest issue here would appear to be the position should I leave the company mid lease, as the employer would be committed to the end of the term (or would this pass to me?)
2) Hire Purchase
I’m a little unclear on the ownership position here, as my employer is purchasing the Tesla. They would however be able to claim the full 100% enhanced capital allowance in year one (saving 19% corporation tax), effectively giving my employer enough capital to cover the initial deposit (plus some).
The car would then be purchased (by the company?) over the payback period with my salary sacrifice funds.
At the end of the term, would I personally own the vehicle, as it is effectively being purchased in the company name? I’m a little confused how this works.
3) PCP
Similar questions to Hire Purchase here, the 19% capital allowance should apply, but who owns the vehicle, and what happens at the end of the term, is the car in my name to then sort the balance financing on the residual owed?
Leasing seems the most straightforward option, but I’ve never leased before and with my config likely to include FSD, I’d likely want to keep it longer term if possible.
So the HP option seems the best to me, as I would also have an asset at the end of the term to keep or use as equity for next vehicle - but I cannot get my head around the ownership of the vehicle and how this would work through.
I would assume I would pay road tax and insurance for the car under all options (employer would not want to pay this!)
Anyone have any experience on this who can fill the gaps for me?
I am keen to get away from my diesel and go electric.. have a wife and 2 kids, age 4 and 8, and will arrange a test drive in the Model 3 soon to check it is big enough for our needs - MX is out of my price range
I did not think I would be able to afford a Tesla just yet, but I’ve been looking into the tax changes for the 2020/21 tax year and it looks very interesting, with 0% BIK applying in that year.
I’m an employee, working for a small company, and am interested in getting my employer to agree a salary sacrifice agreement to get a Model 3.
I’m quite comfortable about impacts to pensions, to ensure these are not negatively affected, so all good there. My employer would also likely chuck his Employer NI savings back into the pot to make savings greater.
I’m a higher rate tax payer, and also currently lose child benefit, so the tax savings could be significant at 40% for income tax, 13.8% employer NI, 2% employee NI and a further ~20% child benefit, so around 75.8% in tax savings as I understand it.
I’m looking at the options and it looks like I could either:
1) Lease
Here, the lease would be through the company for a fixed term, for my benefit… at the end of the lease could I then try and purchase the car?
Most lease companies seem pretty vague around this as an option… Are there any negatives/ tax repercussions of doing this? Any lease companies who offer this as an option (with fixed residual price perhaps?)
The biggest issue here would appear to be the position should I leave the company mid lease, as the employer would be committed to the end of the term (or would this pass to me?)
2) Hire Purchase
I’m a little unclear on the ownership position here, as my employer is purchasing the Tesla. They would however be able to claim the full 100% enhanced capital allowance in year one (saving 19% corporation tax), effectively giving my employer enough capital to cover the initial deposit (plus some).
The car would then be purchased (by the company?) over the payback period with my salary sacrifice funds.
At the end of the term, would I personally own the vehicle, as it is effectively being purchased in the company name? I’m a little confused how this works.
3) PCP
Similar questions to Hire Purchase here, the 19% capital allowance should apply, but who owns the vehicle, and what happens at the end of the term, is the car in my name to then sort the balance financing on the residual owed?
Leasing seems the most straightforward option, but I’ve never leased before and with my config likely to include FSD, I’d likely want to keep it longer term if possible.
So the HP option seems the best to me, as I would also have an asset at the end of the term to keep or use as equity for next vehicle - but I cannot get my head around the ownership of the vehicle and how this would work through.
I would assume I would pay road tax and insurance for the car under all options (employer would not want to pay this!)
Anyone have any experience on this who can fill the gaps for me?
