Second hand EV as company car
Discussion
For leasing it doesn't matter if new or used... if the CO2 is below 50g/km then the full lease rental is a deductible expense.
If the car is 100% business you can also recover all of the VAT on the rentals (if VAT registered), if its a mixture of business/personal use, you can recover 50% of the VAT on the rentals.
If there is personal use then the usual BIK will apply which for 2024/25 is 2%.
If the car is 100% business you can also recover all of the VAT on the rentals (if VAT registered), if its a mixture of business/personal use, you can recover 50% of the VAT on the rentals.
If there is personal use then the usual BIK will apply which for 2024/25 is 2%.
Hi, I'm thread ressurecting again as so few people seem to know their stuff like you guys do.
I part own a ltd company of 35+ people, get paid via PAYE and take dividends accordingly.
My business partener bought a polestar through the company last year - a PCP type arrangment where the company pays the rentals and he pays the BIK.
I was looking at similar, but either with a Macan electric or Cayenne Hybrid. Both fall under the 50g/C02 threshold, but the Cayenne des attract a slightly higher BIK. Macan has a seriously long wait and also the shift to pure electric does still bother me (as a petrol head)
My accountant has said that we can reclaim 50% of the VAT on the lease costs, and that the company can pay them, thats the cleanest way of doing it.
But having scanned through this thread i'm wondering whether I can get a Cayenne E Hybrid (£110k) on a PCP type arrangement, with the business recovering a chunk of the costs.
I literally have no idea about how to structure this? Dealers don't seem to want to give me any form of financial steer, and accountants that inderstand this world seem as rare as hens teeth.
Can anyone help!??
I part own a ltd company of 35+ people, get paid via PAYE and take dividends accordingly.
My business partener bought a polestar through the company last year - a PCP type arrangment where the company pays the rentals and he pays the BIK.
I was looking at similar, but either with a Macan electric or Cayenne Hybrid. Both fall under the 50g/C02 threshold, but the Cayenne des attract a slightly higher BIK. Macan has a seriously long wait and also the shift to pure electric does still bother me (as a petrol head)
My accountant has said that we can reclaim 50% of the VAT on the lease costs, and that the company can pay them, thats the cleanest way of doing it.
But having scanned through this thread i'm wondering whether I can get a Cayenne E Hybrid (£110k) on a PCP type arrangement, with the business recovering a chunk of the costs.
I literally have no idea about how to structure this? Dealers don't seem to want to give me any form of financial steer, and accountants that inderstand this world seem as rare as hens teeth.
Can anyone help!??
Yes, if your business has the cash available, you really should buy something new and fully electric, for the 100% corporation tax allowance.
This is pretty much the only reason Porsche sells so many new Taycans for example!
Your accountant should be able to explain all options to you, rather than a dealer
You can do anything you want, but all have varying costs to either you and / or your business
This is pretty much the only reason Porsche sells so many new Taycans for example!
Your accountant should be able to explain all options to you, rather than a dealer
You can do anything you want, but all have varying costs to either you and / or your business
If its a mixture of business and personal use, yes you can claim 50% of the VAT back on the lease cost, but other than that there's no real advantage to the company.
If you buy an EV however, even its its on PCP, the entire cost of the vehicle (net of VAT) is tax deductible. You won't be able to reclaim any of the VAT unless its 100% business use (i.e. a pool car).
If you buy an EV however, even its its on PCP, the entire cost of the vehicle (net of VAT) is tax deductible. You won't be able to reclaim any of the VAT unless its 100% business use (i.e. a pool car).
Dr Interceptor said:
If its a mixture of business and personal use, yes you can claim 50% of the VAT back on the lease cost, but other than that there's no real advantage to the company.
If you buy an EV however, even its its on PCP, the entire cost of the vehicle (net of VAT) is tax deductible. You won't be able to reclaim any of the VAT unless its 100% business use (i.e. a pool car).
What does that save you on an £80k car for instance? What i'm trying to get to is a set of numbers that says the payments are £1,400 on PCP, but the with the savings in tax the net effect is £XXX per month.If you buy an EV however, even its its on PCP, the entire cost of the vehicle (net of VAT) is tax deductible. You won't be able to reclaim any of the VAT unless its 100% business use (i.e. a pool car).
Sim75 said:
Dr Interceptor said:
If its a mixture of business and personal use, yes you can claim 50% of the VAT back on the lease cost, but other than that there's no real advantage to the company.
If you buy an EV however, even its its on PCP, the entire cost of the vehicle (net of VAT) is tax deductible. You won't be able to reclaim any of the VAT unless its 100% business use (i.e. a pool car).
What does that save you on an £80k car for instance? What i'm trying to get to is a set of numbers that says the payments are £1,400 on PCP, but the with the savings in tax the net effect is £XXX per month.If you buy an EV however, even its its on PCP, the entire cost of the vehicle (net of VAT) is tax deductible. You won't be able to reclaim any of the VAT unless its 100% business use (i.e. a pool car).
Plenty of calculators out there
eg https://quotes.carwow.co.uk/deals/8b3d60e260848899...
Edited by megaphone on Thursday 11th July 13:51
megaphone said:
If the company are paying for it then a lease is the best option, more or less a 'rental'. As mentioned above all costs are then tax deductible.
Plenty of calculators out there
eg https://quotes.carwow.co.uk/deals/8b3d60e260848899...
Only 50% of the VAT is - which only equates to £120 on a circa £1200k rentalPlenty of calculators out there
eg https://quotes.carwow.co.uk/deals/8b3d60e260848899...
Edited by megaphone on Thursday 11th July 13:51
Wheras if the car is purchased then the write down must be worth way more... no?
Dr Interceptor said:
If you buy an EV however, even its its on PCP, the entire cost of the vehicle (net of VAT) is tax deductible. You won't be able to reclaim any of the VAT unless its 100% business use (i.e. a pool car).
Just working through the same justifications myself. As far as I have understood from my accountant, a purchase through PCP or similar would NOT qualify for the 100% First Year Allowance.This is claimable upon the unconditional commitment to purchase. With a PCP, the commitment to purchase (with the final balloon payment) comes at the end of the finance agreement. So the only finance that would qualify would be Hire Purchase, where a deposit is paid and the remainder of the balance is paid in instalments. Any finance that requires a final option to purchase, or asks for an annual mileage would not qualify.
This seems to make sense. If anybody knows any different, please let us know!
RedPie said:
Just working through the same justifications myself. As far as I have understood from my accountant, a purchase through PCP or similar would NOT qualify for the 100% First Year Allowance.
This is claimable upon the unconditional commitment to purchase. With a PCP, the commitment to purchase (with the final balloon payment) comes at the end of the finance agreement. So the only finance that would qualify would be Hire Purchase, where a deposit is paid and the remainder of the balance is paid in instalments. Any finance that requires a final option to purchase, or asks for an annual mileage would not qualify.
This seems to make sense. If anybody knows any different, please let us know!
Correct me if I am wrong, but the PCP agreement locks you in for that agreed time. You can`t just say 6-12mths in you`ve changed your mind and hand it back. Therefore, my interpritation would be the 100% allowance on the 1st year is allowed. Otherwise there`d be 100s of scams going round where a Ltd aquires a vehicle, gets the 100% then returns it after a year.This is claimable upon the unconditional commitment to purchase. With a PCP, the commitment to purchase (with the final balloon payment) comes at the end of the finance agreement. So the only finance that would qualify would be Hire Purchase, where a deposit is paid and the remainder of the balance is paid in instalments. Any finance that requires a final option to purchase, or asks for an annual mileage would not qualify.
This seems to make sense. If anybody knows any different, please let us know!
I`m just mooching around at the Taycan Turbo S`s and working out what is best for me. Im not comfortable with the huge 3 yr depreciation they have and think a 3yr old used is better. I`d rather pay more into a pension via salary sacrafice than take a 70k hit on depreciation.
Another issue is the electric. I`ve a W204 C63 that although 14yrs old, puts a smile on my face everytime I drive it. I can`t see an EV doing the same, apart from when I Launch it.
So I’ve been leasing my EV for the last 30 months through my limited company which is VAT registered. Whether business hire or business PCP, the monthly rentals are deducted as business costs therefore against profits / CT and using it as a mix of business and personal, 50% of the VAT is also recoverable. Any agreement will have a minimum lock in period and you can’t additionally claim the value against CT.
But then so long you don’t claim mileage you can put 100% of charging costs through the business which are also VAT recoverable as well as any maintenance, tyres and insurance. Even accident damage is a business expense.
The pluses are still 2% BIK and what you save in dividend tax in what you’d have to pay yourself to cover the cost of a PCP, insuring, maintaining and charging the vehicle if it were your own vehicle.
As an example, I came from owning a C7 RS7, was looking at a C8 RS7 and the overall cost to me leasing the RS eTron GT my accountant worked out to be half the cost if I leased an RS7, largely due to the tax breaks but for a similar RRP car.
But then so long you don’t claim mileage you can put 100% of charging costs through the business which are also VAT recoverable as well as any maintenance, tyres and insurance. Even accident damage is a business expense.
The pluses are still 2% BIK and what you save in dividend tax in what you’d have to pay yourself to cover the cost of a PCP, insuring, maintaining and charging the vehicle if it were your own vehicle.
As an example, I came from owning a C7 RS7, was looking at a C8 RS7 and the overall cost to me leasing the RS eTron GT my accountant worked out to be half the cost if I leased an RS7, largely due to the tax breaks but for a similar RRP car.
PGC said:
So I’ve been leasing my EV for the last 30 months through my limited company which is VAT registered. Whether business hire or business PCP, the monthly rentals are deducted as business costs therefore against profits / CT and using it as a mix of business and personal, 50% of the VAT is also recoverable. Any agreement will have a minimum lock in period and you can’t additionally claim the value against CT.
But then so long you don’t claim mileage you can put 100% of charging costs through the business which are also VAT recoverable as well as any maintenance, tyres and insurance. Even accident damage is a business expense.
The pluses are still 2% BIK and what you save in dividend tax in what you’d have to pay yourself to cover the cost of a PCP, insuring, maintaining and charging the vehicle if it were your own vehicle.
As an example, I came from owning a C7 RS7, was looking at a C8 RS7 and the overall cost to me leasing the RS eTron GT my accountant worked out to be half the cost if I leased an RS7, largely due to the tax breaks but for a similar RRP car.
Imagine if you’d business pcp’d it and had 100% first year allowance on top. Your accountant didn’t mention that? But then so long you don’t claim mileage you can put 100% of charging costs through the business which are also VAT recoverable as well as any maintenance, tyres and insurance. Even accident damage is a business expense.
The pluses are still 2% BIK and what you save in dividend tax in what you’d have to pay yourself to cover the cost of a PCP, insuring, maintaining and charging the vehicle if it were your own vehicle.
As an example, I came from owning a C7 RS7, was looking at a C8 RS7 and the overall cost to me leasing the RS eTron GT my accountant worked out to be half the cost if I leased an RS7, largely due to the tax breaks but for a similar RRP car.
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