Can I lease a Car Personally or Through Ltd Company
Can I lease a Car Personally or Through Ltd Company.Leasing a car can be a very economical way of running a car. Not only do you not have depreciation to deal with but your road tax is paid for and in some deals, tyres and servicing costs too. Many small business owners who are Directors of their own company often do not know if it is more tax efficient to lease the car personally, or through their limited company.
Can I lease a Car Personally or Through Ltd Company
If you are a Director and have a car or van on lease hire through your business, this will be deemed a benefit in kind and you will be taxed personally on this. The amount you will be taxed on will depend on the car, it’s engine size, value and it’s CO2 emissions, but averages between £400-£750 for your average family hatchback per year. If the car is eco-friendly it will be far less, and equally if you drive a powerful 4×4 or sports car it will be more! The cash equivalent is worked out, and you will then be taxed at 20% on this cash value (or 40% if you are a high rate tax payer).Can I lease a Car Personally or Through Ltd Company
If you know the car that you are interested in, you can calculate the cash equivalent of the car here.
Can I lease a Car Personally or Through Ltd Company
The lease payments you make to your car hire company are tax deductible for Corporation Tax purposes, so you may make some savings there. The tax office has got wise to this though, and in a lot of cases you only save a few pounds, or even end up worse off. To calculate the Corporation Tax you will be saving you need to total the monthly lease payments for your car for the financial year, then work out 21% (or 22% from Apr 2009) of that amount.Can I lease a Car Personally or Through Ltd Company
Can I lease a Car Personally or Through Ltd Company
But, if your business is VAT registered, you will be able to claim back half the VAT you pay. If your car costs £200 plus VAT per month, then you will be saving £20.00 per month by paying it through your limited company instead of personally. This will need to be taken into account when weighing up the savings you could be making, as it can often mean you will go from being worse off to better off by putting it through your business.Can I lease a Car Personally or Through Ltd CompanyCan I lease a Car Personally or Through Ltd Company
Can I lease a Car Personally or Through Ltd Company
If you decide to steer clear of leasing though your business, then don’t forget you will need to pay the VAT in full, so add 20% onto the monthly price you have been quoted. You will not be able to reduce your Corporation Tax, but you will save on the Personal Tax as you will not have a benefit. If you need any more help, please contact Car Lease 4 UCan I lease a Car Personally or Through Ltd Company
Can I lease a Car Personally or Through Ltd Company