Jump to content

Purchasing a Tesla through a limited Company...


Recommended Posts

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.

 

Thoughts?

Link to post
Share on other sites

I am thinking about buying a 12 bedroom house in Hampstead.

Obviously the place to seek advice about this purchase is from strangers on a football forum.

 

In no way am I boasting about my financial position and am genuinely asking for advice.

 

****

Link to post
Share on other sites
I am thinking about buying a 12 bedroom house in Hampstead.

Obviously the place to seek advice about this purchase is from strangers on a football forum.

 

In no way am I boasting about my financial position and am genuinely asking for advice.

 

****

 

So I assume you're not aware but there are a few people on this forum who work for Contractor advice sites and I would guess have also done this. I have asked my accountant, but TBH I don't pay much for him and he's part of one of those large ones that give you a blanket statement when you ask **** like this. I have also asked it here on a specialist contractor website, but no-one has answered my questions:

 

https://www.contractoruk.com/forums/accounting-legal/118141-electric-car-through-ltd-7.html

 

I'm not really sure why you think someone trying to work out the cheapest way to buy a car is showing off, but if you think someone asking accounting advice on spending £30k on a car is showing off then I'm sorry you feel that way.

 

So, do you have an answer, or are you just going to carry on being a whiney little b!tch?

Link to post
Share on other sites
  • 2 weeks later...
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.

 

Thoughts?

Im no expert but I didnt know you can allow for the car to be put through the business. Unless of course there is a allowance as it is electric.
Link to post
Share on other sites
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.

 

Thoughts?

I suggest you read this. http://www.greenmotor.co.uk/2011/07/running-electric-vehicle-as-company-car.html
Link to post
Share on other sites

https://driving.ca/tesla/features/feature-story/motor-mouth-tesla-is-literally-going-up-in-flames

 

Teslas going up in flames are fairly regular news nowadays, even if the Internet seems always amused, often amazed and sometimes

downright terrified at the pyrotechnics Elon Musk’s lithium-ions can produce with seeming spontaneity.

 

Now, to be sure, as the Silicon Valley giant is wont to protest, car fires are hardly new, gasoline being not exactly a fire retardant, and

the internal combustion engine often producing its own fair share of fireballs.

 

Neither is a safe situation. Neither is likely to leave much of a vehicle after the conflagration is over. And, other than the uniqueness of

an electric vehicle going up in flames, neither should be, save for the Internet’s insatiable need for pyrotechnics – that should be read

“sensationalism” this time – particularly newsworthy.

 

What is new, what should be considered truly frightening, however, is the incredible difficulty fire crews are having in extinguishing some

of these Tesla fires and, more alarming, the lengths they need to go to prevent said batteries from re-igniting.

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

View Terms of service (Terms of Use) and Privacy Policy (Privacy Policy) and Forum Guidelines ({Guidelines})