Reply With QuoteI don’t know if this is any help or not but I believe that you will be paying about £380 a year road tax on a new electric car if the list price is over 40K
On an older model 2015 (I think) it would be free.
A bit of help needed please - I have sold my current car and am considering a Tesla as a new car as I will likely be doing more mileage.
Can anyone give me a very quick guide to the pros/cons of the various models - I am thinking a 2nd hand model S with AWD as I had a quattro beforehand but a bit confused between the variations.
Company car tax on a 2nd hand one is 2% BIK - if I choose a "VAT qualifying" car then I think I can claim all the VAT back ? I have asked my accountants but they want 250 to model the numbers so I was hoping someone had done the maths and then I will just get them to check over the final decision.
The alternative is a new car which would have 0% BIK - is it better to consider something new instead - especially as I don't know the depreciation of an electric car ?
It is my ltd so I can flex the options but as it is my money at the end of the day would look at all options.
I currently do about 6k business miles so about 3,000 of claim so althernative I guess would be to run one privately and have about 250 contribution to running costs which previously was all eaten up with petrol ?
I don’t know if this is any help or not but I believe that you will be paying about £380 a year road tax on a new electric car if the list price is over 40K
On an older model 2015 (I think) it would be free.
Not if it is zero emissions - something I will enjoy after paying 580 pa previously !
You’ll be paying tax on any new electric vehicle with a list price of over £40k (it may be a bit higher now). You’re exempt the standard tax if £140 but still subject to the luxury tax for five years.Originally Posted by MB2
My brother (an IFA) recently replaced his leased xc90 with a bought (well HP anyway) Tesla model X. With corporation tax relief (Ltd co), BIK and fuel savings, he estimates he’ll save about £50k over the next three years and still have a £50k asset at the end.
It’ll therefore be practically cost free motoring.
My advice ? Change your accountant.
Nope. ALL cars over 40K are subject to luxury car tax, even electric ones.
Sorry maybe I'm being dense but I don't follow this? I'd be interested if I could get a Tesla Model X for the price of a XC90...
The rough logic is because there is zero BIK for 3 years on a new EV the perk of an electic company car does not add anything to your salary.
If you lease the car through your company then you can recover VAT and offset the cost against corp tax plus not be paying for a car out of taxed income of course.
To recover VAT your ltd has to plan to own the car at the end of the lease at which point I guess it sells the car to the employee.
Thanks I thought were exempt but a closer look shows they are not. Which might make a pre-March 2017 more attractive.
Thanks. So who actually buys the car to lease it? The company?
Yes - the savings come to the company owner in terms of VAT and Corp tax saving but without the penalty to the driver of a large BIK bill so if you are both they seem very attractive- providing you need/want a new car of course...
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I did suggest it was the sort of thing they should be offering to their customers to help them...
My brother’s company own the car and my brother has it as a company car.
The company write off the whole value against tax (saving £19k), my brother pays 0%, 1% and 2% BIK over the next three years and also saves about £10k in fuel (model X has free supercharging).
All told, he and his company jointly save around £50k over the next three years.
The £100k car will still be worth around £50k in three years so it’s effectively cost him nothing (apart from insurance, tyres and servicing).
Interesting. But the company still has to find the 80k or so cash to buy the car?
Or the company leases it of course with an intention to buy. That way all the VAT is reclaimed which I am not sure is possible on an entire purchase but this may depend if new/2nd hand and if 2nd hand is VAT qualifying. Lease with intent to buy you definitely get full deduction on.
Right. Would need to ask my accountant as not sure if it applies to a partnership leasing to a partner.
This site I have always found very handy for calcs
https://comcar.co.uk/
All zero emission vehicles irrespective of cost are exempt from luxury car tax as per the last budget.
https://www.gov.uk/government/public...ssion-vehicles
Looking closer - VAT-registered businesses leasing a car can reclaim 50% of the VAT if the car is used for work and personal purposes, or 100% of the VAT if use is limited strictly to business purposes.
Can see why my accountant suggested I speak to a specialist there for the exact costs...
I think it was £10k down and £1500pm over five years. All paid from the business.
That’s interesting to know. It definitely slipped under my radar.
Grant Shapps owns a Tesla I believe, probably had something to do with it!
Unusually for VED/Car Tax changes, it was retrospective to 2017 as well.
My boss has a Tesla and while I like the idea of it, the reliability for his is awful. In 2 years he has spent roughly 6 months without the car with various things wrong with it.
I'm sure the Audi offering will be a more reliable proposition. As long as the battery tech is similar the car quality is sure to be better.
I have had my Audi e-tron company car since end of January, and no issues with it so far except for the app, which frequently is unable to connect to the car when the car is turned off. Battery life is not as good as a Tesla, I get about 220 miles range with normal usage in comfort or dynamic mode, you would probably be able to stretch it to 250 in efficiency mode and with air conditioning etc turned off.
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Ah so the company leases it from Tesla?
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