OV9

It's a limited company.

I reckon the 530d xDrive should beat my old A6 Allroad's economy at a steady 80mph cruise, so 45mpg was about what I thought feasible. I'd rather have the 530d than the 520d of course!

Jobbo wrote: Thu Sep 19, 2019 12:20 pm It's a limited company.

I reckon the 530d xDrive should beat my old A6 Allroad's economy at a steady 80mph cruise, so 45mpg was about what I thought feasible. I'd rather have the 530d than the 520d of course!

You could search around for a fully optioned 520D...

Jobbo wrote: Thu Sep 19, 2019 12:20 pm It's a limited company.

I reckon the 530d xDrive should beat my old A6 Allroad's economy at a steady 80mph cruise, so 45mpg was about what I thought feasible. I'd rather have the 530d than the 520d of course!

Oh completely - it's night and day difference between a 520d and 530d. The 530d is really impressive.

As it's a company, it may be worthwhile considering a new electric car, for the initial tax relief. I've run the numbers for numerous clients in the last few months - the launch of the Tesla Model 3 has most-definitely caused this.

Also, it's a tax-free benefit for a company to pay for a charging station to be installed at an employee's home address. Ie: no cost to the employee and the company gets tax relief on the installation cost.

Hmm, interesting - I've not spoken to an accountant about it but I had assumed the tax position would be the same on a couple of year old Tesla to a new one. Cheers Mikey.

It's definitely worth looking into as you can claim 100% first year allowances on a new one. It has to be bought new and not leased.

As an example (for anyone looking - not just Jobbo), a new Model 3 (circa £50k) will reduce your corporation tax by £9,500 (current tax rates). As you've noted above, there is 0% BIK from 2020/21, with it increasing by 1% each year after. The BIK rate this tax year is 16%, but you'll avoid that by buying it after the end of the tax year.

As the car would be owned by the company, any repair costs, servicing, insurance etc. can all be paid for by the company, obtaining 19% corporation tax relief (at current tax rates).

One important point not to forget, when the car is sold/traded in, because you have had tax relief in full at the outset, any sale proceeds are taxed in full in the company. Therefore a £50,000 car that you have had £9,500 tax relief on when purchased will have £4,750 of this tax relief clawed back on sale if the car is sold for £25,000.

Comparing this to if you were to buy the car personally, you can look at the tax saving of not having to draw as many dividends from the company to service this personal hire purchase. Based on the HP amount being around £1,000 per month, the total dividends you would have to draw from the company would potentially reduce by £12,000 per year. Based on this being taxed at 32.5%, the total dividend tax saving of buying the car through the company would be £3,900 per year.

So in summary - based on the above example, buying a new electric car can save the company £9.5k in tax (in the first year) and will potentially save you around £3.9k per year in personal tax. There will be a little bit of BIK tax, but this will only be around £600ish in total in the first three years.

Evo - the thrill of tax reliefs

GG. wrote: Thu Sep 19, 2019 2:19 pm Evo - the thrill of tax reliefs

It's the only real excitement from electric cars, isn't it?

mikeyb wrote: Thu Sep 19, 2019 2:22 pm

GG. wrote: Thu Sep 19, 2019 2:19 pm Evo - the thrill of tax reliefs

It's the only real excitement from electric cars, isn't it?

Reminds me, what the hell is Porsche’s Electric Sport Sound on the Taycan!? I’m not sure a louder electric sound will be any better...

I don't think I'd checked the details of the 0% BIK properly anyway; it appears it only applies to cars registered after its introduction, not to any electric car used as a company car during the tax year. Since I'm not about to spend £70k on a Model S and don't really want a Model 3, I'm not going to switch to electricity just yet.

mikeyb wrote: Thu Sep 19, 2019 2:22 pm

GG. wrote: Thu Sep 19, 2019 2:19 pm Evo - the thrill of tax reliefs

It's the only real excitement from electric cars, isn't it?

Depends how badly they're earthed.

IanF wrote: Thu Sep 19, 2019 2:31 pm

mikeyb wrote: Thu Sep 19, 2019 2:22 pm

GG. wrote: Thu Sep 19, 2019 2:19 pm Evo - the thrill of tax reliefs

It's the only real excitement from electric cars, isn't it?

Reminds me, what the hell is Porsche’s Electric Sport Sound on the Taycan!? I’m not sure a louder electric sound will be any better...

It is an odd decision. Will we learn to love the sound of electric motors over ICE if it's a little louder

Jimmy Choo wrote: Thu Sep 19, 2019 2:51 pm

mikeyb wrote: Thu Sep 19, 2019 2:22 pm

GG. wrote: Thu Sep 19, 2019 2:19 pm Evo - the thrill of tax reliefs

It's the only real excitement from electric cars, isn't it?

Depends how badly they're earthed.

True. Although the latter is a little short-lived.