TAX TIP OF THE WEEK – Is it time small company directors re-think their company car strategy?
For owners of small businesses, previously taking out a company car proved a false economy – often creating more personal tax liability than it saved on company tax. Therefore the general advice was keep the car privately owned, then claim a mileage allowance.
However with changes in tax rules for electric cars and a better selection of high spec models being made available, perhaps now is a good time to re-consider this strategy.
Getting yourself a brand new Tesla or BMW IX would have the following tax benefits:
☑️ Minimal benefit in kind tax on the director
☑️ Minimal P11D Ni charge for the company
☑️ 100% tax deductible in the year of purchase
☑️ Partial VAT relief is leased
In addition to the above there will also be the benefit of reduced road tax and congestion charge exemption.
Depending on how you structure your car use, your effective tax bands and what sort of car you are looking for the savings can vary, but if you want to get an idea of what your savings could be then we’d be happy to explain.
In the meantime download our 71 ways to save tax checklist https://bit.ly/2YQbhvr