I recently took delivery of my new RR sport which I purchased outright for £69k. I work as a contractor and take my earnings as dividends through a LTD company. My dividends are engineered to keep me in a basic rate tax band.

Previously my accountant has always told be to buy cars in my personal name and claim mileage from my company at 45 per mile (I do around 8k business miles p/a).

Given that this vehicle has cost significantly more than my previous cars, would it have been beneficial to buy it in the company name instead? I'm not entirely up to speed with BIK tax etc, but would be interested to know how others would have structured the purchase of their vehicles in the same situation.

Thanks in advance MY16 (65) RRS, HSE, White, 21" 507s, Pan/Black Roof, 7 Seats, Ebony/Cirrus, Surround Cams, Fully Color Coded

http://cccfcalculator.hmrc.gov.uk/CCF0.aspx

i would check that out. you are normally a lot better of charging the company for fuel.

A friend of mine has bought himself an audi s5 used for 26000. he was going to put through company but it would of cost him 13000 a year in tax. instead he paid for the car and charges the company millage. it is his company

Just taken the same decision - and running it as a personal vehicle came out trumps.

But still worth getting your accountant to look at the figures. MY2016 HSE D SDV6 - gone due to fuel dilution problems.

By the age of 50 you have the face you deserve - George Orwell.

At first glance it looks great to get your company to buy and run the vehicle as a company expense but it ruins your personal allowance for your personal tax that it seems to always cost you a lot more overall. It probably requires more detailed analysis and all factors to be considered though to really understand the figures.

My accountant also said that I must buy the car privately.

Same boat here

I`ve just purchased my used MY15 HSE at £58,000, paid £43,000 cash and borrowed £15,000 over 3 years at £439.00 a month, so only about £800 interest over the 3 year term. Then 10,000 miles business = £4500 a year from my ltd company for business miles

Thought about putting a smaller deposit in but Land Rovers PCP adds up to about £10,000 over 3 years due to the interest on the balloon

I have just check the parkers company car tax calculator, which for this vehicle is around £4200 as a basic rate tax payer.

So in essence if its costs £4200 per year to keep the £70k in the company, rather than drawing it and using up my tax allowances, that doesn't seem too bad, especially if the depreciation of the vehicle can be offset against corporation taxes.

I probably have the wrong end of the stick here, and hopefully any accountants lurking here will shed some light. MY16 (65) RRS, HSE, White, 21" 507s, Pan/Black Roof, 7 Seats, Ebony/Cirrus, Surround Cams, Fully Color Coded

It`s seen as a £23,500 BIK so if you just sit under the 40% rate. Which most directors do, then add this over and above which would take it to approx a £9,000 tax bill

Pay private and take £4500 out tax free per year, which goes against your corporation tax

Last edited by forest172 on Fri Oct 09 2015 7:39pm. Edited 1 time in total

The other problem is that the significant BIK figure adds to your "total taxable pay" figure and that can take you into very high marginal tax rates where your personal allowance is confiscated. MY2016 HSE D SDV6 - gone due to fuel dilution problems.

By the age of 50 you have the face you deserve - George Orwell.

Stick as you are, massive record keeping with 'company' owned cars. I've done it this way for 20years and believe I checked most option.

In reality there is no way your company miles can be challenged!!

Find a good tax accountant. Then ask him about the possibility of running your business as a LLP company rather than a LTD company. A LLP company will allow you to buy your vehicles through the business without paying BIK. Its actually more tax efficient to contract hire them because you can write off 100% of the contract hire payments and 50% of the VAT on them against taxable profits. There are other benefits of running your business as a LLP as well which I won't bore you with here

Mike. I would love to hear more as I'm sure others would as well. MY16 (65) RRS, HSE, White, 21" 507s, Pan/Black Roof, 7 Seats, Ebony/Cirrus, Surround Cams, Fully Color Coded

bluestone, first I am not a tax accountant just a business owner. Some years ago we were advised that there were tax benefits in our case to move our business activities from our previous LTD company structure into a new LLP structure. One of those advantages is BIK on company vehicles. This was all entirely legal and accepted by HMRC. I can't stress enough that anyone contemplating this should take the advice of a good tax accountant who is familiar with llp structures

For further info just google 'tax advantages uk llp companies' but for info on BIK check this out http://www.macintyrehudson.co.uk/sites/www...8.1.13.pdf