Tax on emisions?
Discussion
As some of you know I now run my own company (self employed). I've just read club lotus mag with a chap claiming to be saving money 'cos he has a new car which is more "environmentally friendly" ie has lower emisions.
Now I run a 1990 M100 Elan as my only transport. I read on the web that older cars are going to be charged more because of higher emisions. I'm afraid that because its my only car it will be classed as a company car and subject to this tax.
Question. am I better buying a newer car, or keeping the old one? Take into account I own my Elan (ie no loans so only petrol and repairs). My income like any small company in its 2nd year is not that great, but has the potential to really take off over the next year or so (potential publishing contract).
Sorry its a boring post, but I wondered with all the brains out there if anyone has had a chat with their accountant (or is an accountant).
Now I run a 1990 M100 Elan as my only transport. I read on the web that older cars are going to be charged more because of higher emisions. I'm afraid that because its my only car it will be classed as a company car and subject to this tax.
Question. am I better buying a newer car, or keeping the old one? Take into account I own my Elan (ie no loans so only petrol and repairs). My income like any small company in its 2nd year is not that great, but has the potential to really take off over the next year or so (potential publishing contract).
Sorry its a boring post, but I wondered with all the brains out there if anyone has had a chat with their accountant (or is an accountant).
If you bought and paid for the car with your own money it cannot be a company car. You say you have your own company, is it a Ltd. or are you a sole trader? If the first then the car would have to be on the company books to be classified as a company car. If you are a sole trader (or in partnership) then providing the car is not in the books and you only claim running costs in line with the mileage done in the course of business, ie. pay yourself a pence per mile rate that is in line with government guidelines then the car is not a company car. My UK tax and company law is a bit rusty since I moved overseas, I am better with Hungarian tax law so I would suggest you get confirmation from a current UK accountant. BTW I am a qualified management accountant and company secretary but now working in the business consulting line, specialising in banking touchpoint technology so do not use my qualifications nowadays.
Kevin may be rusty but that all sounds spot on by my understanding.
My company is actually Ltd and my car has been bought and run 100% from company funds so is a company car in every respect. However even in these circumstances it's possible for a good accountant to find the "cheapest" tax route in my case my car has been valued by the supplying dealer (who will give amazingly low values if you turn up with it covered in shit etc) that value is then off set against my Directors Loan Account and the car becomes mine, I then claim mileage at the Highest rate possible (about 45p I think upto 10K then a bit lower after that from memory) and the actual value on a 20k year more than covers my costs and has a zero rating on the P11D. All this may be different on different cars or mileages and rearly needs an accountant to do the sums and get the "least tax" deal for your individual circumstances.
My company is actually Ltd and my car has been bought and run 100% from company funds so is a company car in every respect. However even in these circumstances it's possible for a good accountant to find the "cheapest" tax route in my case my car has been valued by the supplying dealer (who will give amazingly low values if you turn up with it covered in shit etc) that value is then off set against my Directors Loan Account and the car becomes mine, I then claim mileage at the Highest rate possible (about 45p I think upto 10K then a bit lower after that from memory) and the actual value on a 20k year more than covers my costs and has a zero rating on the P11D. All this may be different on different cars or mileages and rearly needs an accountant to do the sums and get the "least tax" deal for your individual circumstances.
Smeagol.
Been there. I am a partner in Ltd company. We used to have "company cars" - in that the company owned them, paid for all repairs, insured them etc. The company has the benefit of being able to do all this out of its profit, thereby reducing the profit, thereby reducing the amount of tax it pays. i.e. It can pay for running the car tax free.
How the IR get YOU is that it is then a company car and you will be liable for Company car tax.
This may or may not work out to your advantage. The savings in tax on the running costs of the car may offset nicely the personal tax you will need to pay. Remember the spreadsheet for tax will be very different for you as a business owner than it will be for a regualr employee of the business.
Having said that. I own my car. Paid for it out of private funds and merely claim back mileage from my company for the journeys I make in it. Since I run a relatively high cost, new, and environmentally unfriendly (accord to HM Govt. Not me!) this is by FAR the cheapest tax option.
This is going to change in April as the lovely high (63p per mile until 4K, 30ish thereafter) mileage rates are almost certainly going to change for the worse. Which will mean I will NOT be able to claim back the true cost of doing those business miles - or at least if I do the Inland Revenue will want some personal tax off me for the "benefit" I have obtained - b*****s!!!
A possible route for you would be to retain your fun car personally and take advantage of the new company car tax regs coming in in April. These are that very cheap, environmentally friendly company cars will have extremely low personal tax rates.
Might be worth it. Talk with your accountant. This is the route I cam currently considering myself as I don't want to put 1000s of "no fun business miles" on my expensive Porsche when I could do them on some green fiend s***box that the Inland Revenue practically ignores.
Been there. I am a partner in Ltd company. We used to have "company cars" - in that the company owned them, paid for all repairs, insured them etc. The company has the benefit of being able to do all this out of its profit, thereby reducing the profit, thereby reducing the amount of tax it pays. i.e. It can pay for running the car tax free.
How the IR get YOU is that it is then a company car and you will be liable for Company car tax.
This may or may not work out to your advantage. The savings in tax on the running costs of the car may offset nicely the personal tax you will need to pay. Remember the spreadsheet for tax will be very different for you as a business owner than it will be for a regualr employee of the business.
Having said that. I own my car. Paid for it out of private funds and merely claim back mileage from my company for the journeys I make in it. Since I run a relatively high cost, new, and environmentally unfriendly (accord to HM Govt. Not me!) this is by FAR the cheapest tax option.
This is going to change in April as the lovely high (63p per mile until 4K, 30ish thereafter) mileage rates are almost certainly going to change for the worse. Which will mean I will NOT be able to claim back the true cost of doing those business miles - or at least if I do the Inland Revenue will want some personal tax off me for the "benefit" I have obtained - b*****s!!!
A possible route for you would be to retain your fun car personally and take advantage of the new company car tax regs coming in in April. These are that very cheap, environmentally friendly company cars will have extremely low personal tax rates.
Might be worth it. Talk with your accountant. This is the route I cam currently considering myself as I don't want to put 1000s of "no fun business miles" on my expensive Porsche when I could do them on some green fiend s***box that the Inland Revenue practically ignores.
Seeing as I opted out of my company car scheme last October (and bought my Merc), could someone give me some pointers either here, or privately as to what I can claim back from the taxman ?
I seem to remember it's either part of the loan that you have, or the difference between some Govt set figure per mile on business mileage and what your company pays you as a business mileage rate.
I do get a company car allowance, and I get paid 15p per mile.
If the "Click to e mail me" doesn't work, then mail me at: greg.thomas@virgin.net
Thanks in advance,
Greg
I seem to remember it's either part of the loan that you have, or the difference between some Govt set figure per mile on business mileage and what your company pays you as a business mileage rate.
I do get a company car allowance, and I get paid 15p per mile.
If the "Click to e mail me" doesn't work, then mail me at: greg.thomas@virgin.net
Thanks in advance,
Greg
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