Corp tax / Swapping an EV / Timing
Discussion
Chaps - scenario is that when you end the agreement on your company ev and the value comes into the business as pure profit if you get another within the same financial year does it cancel out the hit of returning it?
TLDR what’s the most tax efficient way to swap my company EV please
TLDR what’s the most tax efficient way to swap my company EV please
The sale goes back onto the books as profit, so you either pay the tax or buy another one and put it on the books as a captial asset again. You've basically deferred the tax bill as eventually you'll end up paying it (i.e. you'll sell it and not buy another one).
When I did this, I bought the car when corp. tax was at 19%, when I sold it had transitioned onto the sliding scale system which was annoying so I 'repaid' the tax at about 22%. Fortunately it was a Taycan, so it was worth the grand sum of f
k all, and the tax bill wasn't too bad, but the loss from the deprecitation on the other hand... Never again 
When I did this, I bought the car when corp. tax was at 19%, when I sold it had transitioned onto the sliding scale system which was annoying so I 'repaid' the tax at about 22%. Fortunately it was a Taycan, so it was worth the grand sum of f
k all, and the tax bill wasn't too bad, but the loss from the deprecitation on the other hand... Never again Edited by ecs on Friday 5th June 11:13
If I've understood your query correctly then you're right. In order to minimise the tax impact, if you buy and sell in the same tax period the gain you make on the sale of the 1st EV (which will presumably be the entire sale price as you've taken advantage of the 100% allowance) will be chargeable to CT - if you buy a new EV in the same period, the allowance you can charge to your P&L will (presuming the 1st car isn't vastly expensive and its replacement ridiculously cheap) be offset against the gain on the 1st car and therefore reduce CT.
Essentially the impact on your taxable profits will be the difference between purchase price of the new car and the sale price of the old car.
VAT may or may not have an impact dependent on whether you can claim the VAT back on purchasing.
Essentially the impact on your taxable profits will be the difference between purchase price of the new car and the sale price of the old car.
VAT may or may not have an impact dependent on whether you can claim the VAT back on purchasing.
DSLiverpool said:
Chaps - scenario is that when you end the agreement on your company ev and the value comes into the business as pure profit if you get another within the same financial year does it cancel out the hit of returning it?
TLDR what s the most tax efficient way to swap my company EV please
Not quite sure about your first sentence. By 'ending the agreement' this indicates the car is not your company's car but a lease?TLDR what s the most tax efficient way to swap my company EV please
MustangGT said:
DSLiverpool said:
Chaps - scenario is that when you end the agreement on your company ev and the value comes into the business as pure profit if you get another within the same financial year does it cancel out the hit of returning it?
TLDR what s the most tax efficient way to swap my company EV please
Not quite sure about your first sentence. By 'ending the agreement' this indicates the car is not your company's car but a lease?TLDR what s the most tax efficient way to swap my company EV please
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