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Asset finance

burgburg Experienced MentorGloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,440
Just want to confirm my thoughts on the following issue:-

Limited Company wishes to purchase a new van. Finance company will not allow the Ltd Co finance but will allow the director.

The Van can be in the Company name on the registration document but the finance will be in his personal name.

Can he charge the interest to the limited company as he has incurred this cost in relation to a business asset? No BIK as there is interest to offset against?

From a VAT point of view as long as it is invoiced to the company and then there shouldn't be any problems.

Thanks in advance
Regards,

Burg

Comments

  • AatAbiAatAbi Feels At Home Registered Posts: 47
    many people wondering why we live in credit crunch, well, this is the answer, finance company will need to see an invoice for the asset, the company owns the asset and have the name on the invoice, the finance company somehow paid out the money into the directors account, why?!! no one knows.
    If the director did not pay!!! what will happen then, can the finance company take back the asset?!!! very much doubt it...so the risk is huge..

    This is how it works in similar conditions...The company still can get the assest, the director will sign as a guarantee. simple as.
  • Jon_1984Jon_1984 Well-Known Registered Posts: 186
    Agreed - the finace company should be asking the director to guarantee the loan, not give it directly to them.
  • AatAbiAatAbi Feels At Home Registered Posts: 47
    in answer to your question, the director has to take the interest back as (responsibility allowance) paid onto his salary (taxable), which him or the company will have to pay the tax..
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