Company car.

Ryan Mundy MAAT
Ryan Mundy MAAT MAAT, AAT Licensed Accountant Posts: 22 New contributor ?
Hi all and thanks for taking the time to read this.

My client has just incorporated and is in the process of buying a used car.

He has asked me to advise whether it's best to buy it himself and charge the company per mile (tax free).

Or buy it through the company and pay the BIK and NIC'ers.

My understanding has always been that the former is more beneficial in most circumstances.

Here are some details:

Cost (used car): £16,500
Annual running cost: £1,000
Tax payable per HMRC calculator: £900

My client is VAT registered and would only keep the car 12-24 months.

Can anyone help me compare the two options, and come up with some figures please?

Also, what are the VAT implications of selling or trading in the car in 12-24 months?

Sorry, I don't know the Co2 as yet, but it's a fairly sporty Audi A3, so expected to be rather high.

Nor do I know the estimated mileage or percentage of business/personal use.

Any help would be gratefully appreciated.


  • Richard2013
    Richard2013 Registered Posts: 23 Regular contributor ⭐ ? ⭐
    You'll be interested in the list price of the car when working out future possible benefits in kinds if it is different from the cost of the car (£16,500). Does the cost include VAT?
  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    To be honest unless it's low-emission it's unlikely to be beneficial as a company car. If you can find out the CO2 emissions and the list price then you might get more useful replies.
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