I have set up a Ltd company to manage a number of properties I own. I intend to pay the company a management fee and offset this against the cost of a car (to be used solely for business purposes) and other expenses. How do I ensure I do not pay any tax on the vehicle as a benefit in kind? The vehicle is to be used for attending viewings, for use during repairs and maintenance work and collecting materials & furniture etc..
Ian Bond
Replies (3)
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Almost impossible
Although you may intend that the car is only used for business, the Revenue can argue that as owner manager, you can use it for private mileage any time you want. Therefore the BIK rules apply.
You could try writing a contract with yourself prohibiting any private use, and arrange insurance that excludes private use (bit risky this, mind).
This may seem inequitable, and perhaps it is. Expect an uphill battle and a good chance of eventual defeat on this one.
If it was a van, you would stand a better chance, especially if you have your own car as well. And if you loose the argument, the van benefit is a lot less.
Possibly
You don't say whether or not this will be your only car. If it is, then there is bound to be some private use. If it is a second car, then you can ensure that it is only used for business purposes and hence attract no benefit. But why have a second car just to attend viewings etc?
I've managed on several occasions to argue with the Revenue that a second car is being used solely for business purposes.
I think a better approach is for you to own the car personally and charge the company the tax free mileage allowance, currently 40p per mile for the first 10,000 miles.