Car Question - would anybody offer their opinoin please?

For general discussions, questions and comments on ATT related matters.

Moderator: Bluewednesday

Car Question - would anybody offer their opinoin please?

Postby Andypandy » Sun Aug 23, 2009 10:06 pm

Hi folks, would you please give your opinions on the following question I've been asked. Thanks in advance for any replies!
- Currently have a car on personal lease, for which the final purchase balloon payment is due in October
- Would like the company to buy the vehicle
- I will continue to use it for personal and business use
- I currently pay for fuel myself and claim back business mileage as expenses

What is the most tax-efficient solution?

I think that the company should buy the car from the leasing company and I should continue to use it as I currently do. If so, do I have to pay the fuel scale charge? Am I liable for a tax penalty for having a company car? Can I still pay for fuel myself and then claim back business mileage to avoid the fuel scale charge?
Andypandy
 
Posts: 39
Joined: Wed Aug 12, 2009 6:22 pm
Location: At the PC
Has thanked: 0 time
Been thanked: 0 time

Re: Car Question - would anybody offer their opinoin please?

Postby Bluewednesday » Mon Aug 24, 2009 7:26 am

The fuel scale charge only relates to VAT so doesn't cost you.

If you have a company car you will get a benefit charge which is impossible to quantify without more details of the car and a fuel charge if you do not reimburse private mileage.

Your company will also pay Class A national insurance on that benefit charge.

The most tax efficient way for you is to pay the balloon payment yourself and then claim business mileage, as long as that is financially possible!
bluewednesday
User avatar
Bluewednesday
 
Posts: 2859
Joined: Mon Mar 15, 2004 2:43 pm
Location: Milton Keynes
Has thanked: 0 time
Been thanked: 2 times

Re: Car Question - would anybody offer their opinoin please?

Postby Mature-Student » Mon Aug 24, 2009 7:43 am

Agree with Bluewednesday on the tax aspect. FYI, you would have to reimburse all of your private fuel costs, not just some, for the fuel not to be a benefit in kind, assuming your employer would be paying for your fuel. The car benefit increases based on the car's CO2 rating.

Re the practicalities, it's a personal lease, so you pay the lease payments and it's not a benefit in kind? So why would your employer pay your final payment for you and allow you to use it as a company car? Or were you hoping to show your employer it would be more tax efficient for them to do so?
Passed final ACCA exam 08/2008
Admitted to membership 11/2008
Started studying CIoT 2009
- mad? I think I must be!!!!
User avatar
Mature-Student
 
Posts: 1355
Joined: Sat Jan 15, 2005 8:02 am
Location: Scotland
Has thanked: 0 time
Been thanked: 0 time

Re: Car Question - would anybody offer their opinoin please?

Postby Andypandy » Mon Aug 24, 2009 2:44 pm

Thanks for the replies folks, you've been a big help.
Andypandy
 
Posts: 39
Joined: Wed Aug 12, 2009 6:22 pm
Location: At the PC
Has thanked: 0 time
Been thanked: 0 time


Return to General ATT Discussion

Who is online

Users browsing this forum: No registered users and 1 guest

Accountancy Students

© 2013 Accountancy Students. All rights reserved.