Times are changing and one of the decisions often asked by clients of their Accountant is “Should I buy this car through the company or personally?” A few years ago the answer inevitably for most business owners (not employees) was personally, especially when looking at the likes of the supercar and other gas
Now the answer I find myself saying to most clients is “it depends” there is no
Recently I was asked about a particular brand of supercar and thought “oh no not again another car another disappointed client” but was gobsmacked by the answer I found myself looking at, so much so I had to look at the calculation 10 times before I convinced myself I was right.
So let’s compare two cars (other makes and models are available).
1. Porsche Carrera GTS (List Price £91,098) (CO2 Emission Level 223g/km)
The car and fuel benefit for the Porsche Carrera
Capital allowances would amount to £7,288 per annum which equates to corporation tax relief of £1,458. At the current rate of capital
2. BMW i8 (List Price £104,590) (CO2 Emission Levels 49g/km)
The car and fuel benefit for the BMW i8
Capital allowances would be £104,590 (assuming the car is brand new) which equates to corporation tax relief of £20,918. (based on 2015/16 allowances)
It’s staggering and an engineering achievement that these types of cars are now more energy efficient than some of the standard cars that business owners are driving. Sadly, many business owners are not likely to be able to afford one of these supercars but it should make you think next time you are considering changing your company vehicle.
Before you buy your next vehicle please remember to pick up the phone and ask your accountant “should I own it in or out of the company”
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.