LLP members & car purchase

PatsyC

Hi I have a query regarding an LLP and car purchase. Both of the members want to buy a new car through the LLP, either by HP or maybe leasing, they have not decided yet. Can anyone help with whether this would be treated in the same way as a company car through a Limited company? I am new to this and have not worked with an LLP before. Thank you.

Gem7321

For tax purposes the LLP is treated as a partnership and the partners individuals so the BIK rules do not apply if that's what you mean.

PatsyC

Thank you yes I did mean would the BIK rules apply.Now I know they do not :-)

PatsyC

Hi I have done some further work on this as part of my CPD to allow me to do business tax eventually and am now confused again.
Could someone please clarify if I am on the right lines or not - in order then to buy a car via the partnership they would either have to
1) pay in full and claim first year allowance or WDA depending on the emissions rating and assuming they had enough capital in the business
2) lease the cars through the business
3) buy on HP and claim the interest only

Thank you

Gem7321

Yes (and adjust for any private use).
Is there a reason that the LLP is intent on purchasing the vehicle itself? Often it is more tax-efficient for the partners to claim mileage on their own cars.

PatsyC

Thank you that is a great help and at least I can see I am on the right track. I am not sure why they want to buy the car through the LLP, they might think they will get a better deal on the purchase and reduce any tax liability in the process

Gem7321

Just remember the lease rental restriction if they do go down the leased car route. It's probably best to run the figures on the vehicle they have in mind and see which gets the best result (including mileage basis).