Buying a classic car through my Ltd company
Discussion
I know the answer is 'ask your accountant' but I'm just wondering if it makes any sense to buy a classic car through my Ltd company.
For info I have a Private hire company, there is no need for me to have a classic car on the books - I certainly couldn't use one for business purposes but basically there is more money in my company account than my personal one. I have bought and sold a couple of licensed vehicles used them briefly then sold for some profit but I wouldn't exactly class myself as a car trader.
I'm looking at an old Porsche 911, pre89 and values are around £40-£50k
Any pros/cons?
For info I have a Private hire company, there is no need for me to have a classic car on the books - I certainly couldn't use one for business purposes but basically there is more money in my company account than my personal one. I have bought and sold a couple of licensed vehicles used them briefly then sold for some profit but I wouldn't exactly class myself as a car trader.
I'm looking at an old Porsche 911, pre89 and values are around £40-£50k
Any pros/cons?
You'd be better posting this in the business section.
But, IIRC.... If your company buys the vehicle then the vehicle may only be used for company purposes. It doesn't belong to you, it belongs to your company and it must be kept at the company premises. Unless you can demonstrate that it is essential to the operation of the company then it will not be tax deductible. If all the above apply but you use it for your own pleasure, then you are liable for BIK tax.
Obviously them the rules and whether or not HMRC pick up on it is another matter.
But, IIRC.... If your company buys the vehicle then the vehicle may only be used for company purposes. It doesn't belong to you, it belongs to your company and it must be kept at the company premises. Unless you can demonstrate that it is essential to the operation of the company then it will not be tax deductible. If all the above apply but you use it for your own pleasure, then you are liable for BIK tax.
Obviously them the rules and whether or not HMRC pick up on it is another matter.
Any private use and you will be taxed at market value multiplied by 37% (2001 cc or higher). So at £40K market value, you'd be taxed on a deemed benefit in kind of nearly £15K per annum. Easier to just draw the money and pay the tax.
https://www.gov.uk/hmrc-internal-manuals/employmen...
https://www.gov.uk/hmrc-internal-manuals/employmen...
StevieBee said:
You'd be better posting this in the business section.
But, IIRC.... If your company buys the vehicle then the vehicle may only be used for company purposes. It doesn't belong to you, it belongs to your company and it must be kept at the company premises. Unless you can demonstrate that it is essential to the operation of the company then it will not be tax deductible. If all the above apply but you use it for your own pleasure, then you are liable for BIK tax.
Obviously them the rules and whether or not HMRC pick up on it is another matter.
This is wrong. The car does not need to be used solely for company purposes nor does it need to be stored at the company premises (same as with any other company car). BIK tax will be payable if you use it other than for company business.But, IIRC.... If your company buys the vehicle then the vehicle may only be used for company purposes. It doesn't belong to you, it belongs to your company and it must be kept at the company premises. Unless you can demonstrate that it is essential to the operation of the company then it will not be tax deductible. If all the above apply but you use it for your own pleasure, then you are liable for BIK tax.
Obviously them the rules and whether or not HMRC pick up on it is another matter.
It only makes sense if you buy a classic car as defined by HMRC - this is a car worth less than £15k which is over 15 years old, in which case the BIK is based on the original purchase price.
So it would work well to have, say, an MGB as a company car if that appeals.
stinkyspanner said:
Paul Goldstar said:
I was researching this topic when the thread came up. Surely you're overthinking this? Take a Director's loan, buy the car, run it for however long and sell the car, pay back the DL before it becomes due. Simples
That's pretty much what I'm doing.. Martin315 said:
This is wrong. The car does not need to be used solely for company purposes nor does it need to be stored at the company premises (same as with any other company car). BIK tax will be payable if you use it other than for company business.
It only makes sense if you buy a classic car as defined by HMRC - this is a car worth less than £15k which is over 15 years old, in which case the BIK is based on the original purchase price.
So it would work well to have, say, an MGB as a company car if that appeals.
Wow! So if I was in the market for a Model T, which I am, it would make sense to buy through the company as a company car and pay the BIK on the list price when new of say £800? Then all the servicing costs and insurance etc can be expensed? It only makes sense if you buy a classic car as defined by HMRC - this is a car worth less than £15k which is over 15 years old, in which case the BIK is based on the original purchase price.
So it would work well to have, say, an MGB as a company car if that appeals.
PurpleFox said:
Martin315 said:
This is wrong. The car does not need to be used solely for company purposes nor does it need to be stored at the company premises (same as with any other company car). BIK tax will be payable if you use it other than for company business.
It only makes sense if you buy a classic car as defined by HMRC - this is a car worth less than £15k which is over 15 years old, in which case the BIK is based on the original purchase price.
So it would work well to have, say, an MGB as a company car if that appeals.
Wow! So if I was in the market for a Model T, which I am, it would make sense to buy through the company as a company car and pay the BIK on the list price when new of say £800? Then all the servicing costs and insurance etc can be expensed? It only makes sense if you buy a classic car as defined by HMRC - this is a car worth less than £15k which is over 15 years old, in which case the BIK is based on the original purchase price.
So it would work well to have, say, an MGB as a company car if that appeals.
isleofthorns said:
afaik, only if the car is worth less than 15k in today's open market value -- if more than 15k, you pay the BIK on the current market value. I would have thought a model T is more than 15k?
Correct so bear in mind that if the market value of the car exceeds £15k during the company’s ownership, you will be paying the BIK on the current value rather than the original purchase price Gassing Station | Business | Top of Page | What's New | My Stuff