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Discussion Starter #1
What are the pro's and cons. What is the tax penalty? The BIK rules seem to be pitched at classic cars over £15k value which mine aren't! So I don't really understand how to apply them.

I'm considering selling my car to the company for a few years, then I can at least put the (expensive) maintenance bills throughh the company and avoid paying tax or VAT. Then in a few years time I buy the car back at the depreciated value.
 

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hmmmm. Neat thinking. I hope that depreciated value is based on book figures 'coz most classics have a tendancy to hang on to their price tags if properly kept.
 

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As I understand it cars less than £15k in value are taxed at their original list price! So you need to do a bit of research and find an old Car mag/brochure. Like you say you can then put your running costs through the company...
;)
 

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Of course if it's a 1960's car they were about 3p new so you'll pay virtually no tax ... obviously as classic cars tend to appreciate in value you'll have to pay capital gains tax when you sell it ...
 

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I had a colleague at work that used an old E21 323i Bmw as a company car a few years back, he didn't pay any road tax for it (since cars over 20 years old here don't pay it unless they are worth more than a certain value) but insurance companies weren't to happy about it and he paid more insurance than my 155v6 and the insurance company refused to grant him tow truck service having to pay another company for it on the side. He ended up with a higher price per mile than the 155.

Just for refference here are the numbers:

Alfa 155v6:
Insurance: U$D 72/Month
Road tax: U$D 31/Month
Fuel consumption: U$D170 Month

Total: U$D273 Month

Bmw 323i:
Insurance: U$D91/Month (due to higher valuation, same company)
Road tax: None
Fuel consumtion: U$D190/Month (same milleage)
Tow truck service: U$D18/Month

Total: U$D 299 Month

Plus he didn't have the pleasure of driving the alfa!
 

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I spoke to my accountant and went ahed a did this. It is taxed as a benefit in Kind but a the original list price (£2300!!). For me there was no insurance penalty. The main benefit is that you can offset all the running and maintanace costs against the companies profit, which for a classic alfa is a deal :):)
 

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Discussion Starter #7
Yep, thats what I thought. Then you buy the car back at it's depreciated cost in a few years time, it has cost the company nothing at all. And you get effectively a £2k tax free benefit (assuming car is still worth £5k)

And you've saved about over 50% on the running costs (assuming it's your own business) because you're not paying VAT, income tax, NI etc or corporation tax.

My ballpark figures were:
Car Value £5k Personal ownership over 2 years, cost for maintenance etc. £2k (for which cost to company to pay me is effectively around £3k)

Through Company, cost for maintenance £1700 (2k less VAT).

Plus you save some corporation tax on the depreciated amount.

Actually I've decided not to do it as I'm having a new Alfa through the company so can't warrant 2 cars on the Company books!
 

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company car

Hi

I have a 1975 2000 GTV as my company car (own company) original list price is £2999 so BIK tax is around £200 per annum- ironically the car has just had major suspension work and now the braking system is being overhauled as we speak.

You can have more than one company car at the same time, just that you pay tax on both.
 
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