How much is that car?
Do you fancy a new car? If you want your company to buy one for you to use, you should first consider the tax costs for the company and for you personally.
HMRC provide an online calculator which will work out the taxable benefit for you where the company provides the car, but this only works for 2012/13 and earlier tax years. We can help you work out your tax position for future tax years.
The taxable benefit for using a company car has been increasing year on year, supposedly as an environmental measure, but the charges on even the cleanest cars are going up. The taxable benefit for electric cars is due to leap from zero to 13% of the car’s list price from 2015/16.
The question of whether the company or you should purchase or lease the car involves factors other than the taxable benefit, so you need to consider all of the following costs:
- insurance;
- repairs and servicing;
- finance to pay for the car;
- leasing costs which may be disallowable for tax purposes; and
- any capital allowances claimable by the company.
If that sends your brain into a spin, we’ll be happy to give you a steer.
