So next March I’m thinking of going down the electric route with the release of the new Tesla 3. The purchase would be through my Limited Company, and as such there are a number of tax benefits that I would benefit from. However, I’m trying to work out how much the car will cost me, and what is the best way to purchase it.

A bit of background: I pay 32.5% tax on dividends. I tend to keep around a years worth of salary in the company in case of a lack of work. Therefore, I am thinking of purchasing through HP.

To the Maths:

The car cost £53240. You are allowed a 100% allowance on the corporation tax in the first year, so I will save £10115.

This will be put down as the deposit on the car, so the car cost will reduce to £43125.

The remaining £43125 will be funded either through a 5 year HP deal (£828 per month, and £49680 cost for the business). There is no road tax payable (I believe), I would have to pay 2% BIK per year which is a negligible cost (£424). Insurance, servicing etc can be paid through the company.

If I were to sell the car I would have to pay Corp tax on the sale of the car, so I would guess around £5k if I sold after 5 years. I would also save around £9000 over the 5 years in fuel costs personally.

So, a couple of questions to those that know this better than me.

1. I am trying to work out the real cost to myself versus what I would pay to buy/lease a car personally. Would this be £828 x 0.81 (minus corp tax) x 0.675 (minus dividend tax) = £453 p/m, or would it be £828 x 0.675 (minus dividend tax) = £559 p/m
2. Once the 5 years are complete and the car is purchased, can I just keep the car as a depreciating asset within the business, and keep using it (or give it to the missus) ad infinitum and just pay BIK?
3. Does the overall maths above make sense?

If so, it seems to me like it is a bit of a no-brainer…as long as I keep my company going.