EV through my business…. Best way?

[SSG1000]

Hi all,

Looking to replace my current diesel beast for an EV and putting it through my business.

Can I ask:

What are the benefits and best way to do this?

Been looking at Tesla’s as they seem to be the best out of the bunch at the moment.

[NDA]

SSG1000 said:

Hi all,

Looking to replace my current diesel beast for an EV and putting it through my business.

Can I ask:

What are the benefits and best way to do this?

Been looking at Tesla’s as they seem to be the best out of the bunch at the moment.

I am not an expert in these things - however I did buy my Tesla through my small consultancy business. I needed a new car and had a fee coming in that would cover the cost of the car. My accountant basically said that you remove the cost of the EV from the taxable amount in the company. In other words, if you have £60k in your company and buy a £50k EV, then the taxman only sees £10k that he can tax.

There will be a Benefit In Kind (BIK) tax of 1% rising to 2% annually - but that's fairly insignificant.

It worked for me because I had a sum in the business that covered the cost and therefore it reduced my tax exposure. Also I did need a new car - I didn't buy it just because of the tax, but that helped the decision.

Some here will have more experience and knowledge about leasing for example, I don't.

Also you can insure the car personally even if your company owns it. I did this through Direct Line pretty easily.

I am not clear about what happens when I want to sell it - but will find out when the time comes.

[48k]

SSG1000 said:

Hi all,

Looking to replace my current diesel beast for an EV and putting it through my business.

Can I ask:

What are the benefits and best way to do this?

Been looking at Tesla’s as they seem to be the best out of the bunch at the moment.

I am not an expert but about to lease a car through my Ltd co and this is how my accountant explained it to me:

If the company buys it then the it's deductible for corporation tax purposes.

If the company leases it, then the lease payments are deductable for corporation tax purposes and you can claim back 50% of the VAT on the lease payments.

If you use it for personal reasons it becomes a Benefit in Kind which attracts Class 1a NIC. The BIK amount is calculated based on the list price multiplied by the CO2 emissions percentage (for electric vehicles HMRC use the range). This is then multipled by 13.8% to give the class 1a NIC payable for the year.