Cars! What are your options?
Michelle Rowe blogs…
I don’t pretend to know anything about cars … as long as it drives me from A to B I don’t really care what it looks like or what the performance is like. But being an accountant, I care very much about how much it costs me!
Recently I was asked by a client about the possibility of them purchasing a car through their limited company. My first thought was to try and put them off because in the past the cost of having cars in a limited company has attracted a large taxable benefit-in-kind … but then he said the magic words … ZERO-EMISSION CAR.
Now, I’m not talking solar powered vehicles from the future, Zero-emission cars can actually be a good idea – e.g. the Nissan Leaf or the Renault Zoe. At present they are have a 0% tax rate band for the employee and therefore doesn’t cost them anything more or the company any additional national insurance (current changes are anticipated to this in April 2015).
If you don’t feel like you want to go the whole electric hog , low-emission cars might be something to think about (under 75g/km) – e.g. the Toyota Prius or the Vauxhall Ampera. The annual benefit-in-kind for such a vehicle is currently only 5% of the list price (provided the employee pays for all private fuel).
In addition to the low taxable benefit on the employee, the company can actually claim 100% of the vehicle cost as a capital allowance deduction in the year of purchase.
So, how about it? not only do you get a lovely new car, you could be saving some money AND be helping to save the environment at the same time (hooray!). If you want to know more, get in contact with us here at The Peloton and we’ll be able to be put some numbers behind the idea for you.
Michelle Rowe FCCA
If you’d like to speak to Michelle or one of our other charted accountants about cars, call 01326 660022 today.