Talk Morgan Forums Morgan Sports Cars Classic Morgans (pre-CX) Company car

Hi All,

I'm currently working as a contractor, being paid through my own company. As director, I'm considering the option of buying a Mog as a company car! Has anyone done this/doing this?

I'm VAT registered and I think it could be a tax effecient way of running an extra car.

Phil :o)

I think the extra tax on the benefit will make it unattractive.
We now just buy our own cars.

ask MMC for the commercial VAT reclaimable version with flat bed or pick up, otherwise the savings won't be worth the accountants bill
though you can always charge business miles at 45p per mile

Phil

As a company vehicle you won't be able to claim back the VAT, over the years the taxman has done his best to make company cars unattractive unless your looking at something with very low emissions. I'd keep you mog to yourself especially with the high residuals on Morgans

The two big problems with running a MOG as a company car are that you pay tax based on the list price of the vehicle (not what you paid or what it's worth) and the emissions
I could run mine as a company car but would pay a heap more tax.

You could buy privately on finance and take the monthly payments out of your company as a dividend payment, which might ease the tax burden.

You won't be able to recover the VAT on the purchase but if you keep private fuel receipts apart from the rest, you might be able to recover the VAT on business fuel used.

Please don't take my word on this, do check with your accountant!

Paying for the car through dividends is like buying cash. If you're a higher rate tax payer (or taking these further divs out puts you over the threshold) you will be liable for tax on the amounts at the difference between higher rate and normal rate.

And rather than trying to claim vat back on invoices your better off charging out at 45p per business mile, every business mile (until threshold then Lower rate).

My info my be out of date (best advice is that above of seeking appropriate accountant advice) but your personal BiK (benefit in kind) is the % as shown on Hmrc website for that particular car (is dependent on co2 emmissions and fuel type) multiplied by actual vehicle value new (inc tax and extras) per annum. So simply put a £40k car with a 20% liability means that you are personally liable for tax as though you hhave earnt an additional £8k per annum at whatever tax rate that puts you in (or a mix Of the two if it takes you over the threshold).

Now it doesn't stop there as the vehicle is a fixed asset and there fore depreciated over a few years, rules were 20%pa but are emmissions related now. This means that your company doesn't get the benefit of tax savings at the same rate. Service and insurance costs however are immediately deductible as an expense.

The crux of the matter means that if it's a very low emmissions car (4/4 sport?) it could well be viable especially as actual depreciation will be relatively low but you will have to run all numbers in a spreadsheet to see if it is

If I have time, I might do it just for fun

Please note, I am not an accountant nor a tax expert so please seek proper advice before doing anything!

Hi All,

Thanks for your thoughts - I guess it was a bit of a flight of fantasy, one of my wilder, off the wall ideas! the idea of still appeals to my mischevious nature - company cars are supposed to be Ford or Vauxhall!

Phil

Ahh!! Don't you mess the days when a company car could be a motorbike?