how do i lease a car through my business
Do you ask how do i lease a car through my business.Can you negotiate your own package or have your own business? Then you need to be thinking about the tax implications of how you arrange your car leasing.
how do i lease a car through my business
Perhaps you plan to use your car for both business and personal use. You often use it to drive to meetings in a neighbouring town but you use it as your personal car the rest of the time. You then have a choice of having your business buy it (and then having to pay what the UK calls benefit-in-kind tax because the taxman regards the personal use of the company car as effectively part of your salary) OR you can buy it personally and then report your business usage as a expense and get reimbursed for it directly. Let’s call the first option the business route, and the second the personal route.how do i lease a car through my business how do i lease a car through my business
Frequently when asked about the way to go, the expert has to admit “It all depends.” Sometimes that’s a little bit of a cop-out because the expert doesn’t want to move off the fence. Sitting on the fence is a little uncomfortable, but it’s a safe place to be. Now, despite my aversion to taking the easy way out, I have to admit that this is a time when it does all depend on your personal circumstances, i.e. how your own (fairly complex) calculations work out, what relative propotion of usage is for business or personal purposes and how strong your how do i lease a car through my business negotiating position is with your employer. You may have to take what you’re given by your employer, but if not – perhaps you own the business, you should definitely take the time to work through the implications of your choice.
how do i lease a car through my business
Some time ago how do i lease a car through my business , the business route and the ‘company car’ was a standard component of executive salary packages but it’s become less common as the taxman moved against it by introducing company car and car fuel benefit charges which incur a personal tax liability. However a significant proportion of cars bought today in the UK are still company cars, so the business route is still attractive to many. When how do i lease a car through my business the UK business buys plant and machinery, it can claim ‘capital allowances’ which can be written against profits, thereby decreasing taxes. However cars are a particular case and attract different treatment from other classes of equipment. If the car has some private use, then the car must be treated distinctly from all other assets owned bhow do i lease a car through my businessy the company. The private proportion of total usage must be calculated and disallowed from the total. If the car has a value of over £12,000 then the maximum writing-down allowance (WDA) is £3,000 per annum and this is calculated before the private usage adjustment is made. Therefore records have to be kept to show what proportion of the annual mileage was indeed business and what proportion was personal.how do i lease a car through my business
There is no VAT tax benefit for a business purchasing a car when there is any personal usage at all. The VAT can not be claimed back unless the vehicle is demonstrably for business purposes only. how do i lease a car through my business If the business leases the vehicle and you drive it for both business and personal purposes, then the company can claim the monthly cost of the lease against profits. The monthly amount claimable is limited to 85% if the vehicle is rated as emitting more than 160 g/km. If the car is rated at less than the key level of 160 g/km, then 100% of the amount is allowable. This is to encourage manufacturers to make cars that create less pollution.how do i lease a car through my business
Previously the limit was determined by the total value of the car and no car with an initial value of over £12,000 achieved the 100% rate. Now many far more expensive vehicles actually do emit less than 160 g/km and so qualify for 100% of the leasing costs to be written off against profits. This includes many models from Audi, BMW, Mercedes and Lexus. This change is worth bearing in mind! This means that it is more likely that leasing a car under business contract hire will make more sense for tax reasons than purchasing the car if there is any personal usage. The business route does incur benefit-in-kind personal taxes. These company car and fuel benefit (if the company pays for personal fuel) taxes are best calculated using the HMRC online calculator at http://www.hmrc.gov.uk/calcs/cars.htm. As an example and without any additional complications, a £12,000 car provided as a company car would be equivalent to increasing the taxable total salary by £1,800 a year.
The personal how do i lease a car through my business route requires you to keep a record of all business mileage. Your business can then repay you 40p/mile for the first 10,000 miles and 20p/mile thereafter, without you incurring any additional taxes. This does require you to keep a record, but you should be doing so anyway. It’s relatively simple and likely to be the best option if you only use the vehicle relatively infrequently for business purposes.how do i lease a car through my business how do i lease a car through my business
If you’re interested in exploring the car leasing route further, especially how do i lease a car through my business if you’d like to see what best car leasing deals we have on executive cars for business contract purchase, I suggest you check out our website at www.carlease4u.com
how do i lease a car through my business