A new client of mine has approached me with the question of company car purchase, the client is considering the tax implications of buying a company car.
The options are as follows -
(1) The director loans the finances for the car to the company and charges interest on the loan, the director will still use the car for business purposes and claim mileage as appropriate.
(2) The company buys the car as an asset, the director uses it for business purposes and claims mileage.
Overall i need to know what would be the most tax effective option to the company for
VAT
Corporation Tax
Asset Management
NI Contributions
Directors Self Assessment
Please help.
Ade
New ACCA
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Replies (1)
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Third option is that director buys the car and charges the company 40p per mile (tax free).
To know which is the best option you would have to know more about the car, the business and private mileage, then work the numbers. There's no 'one size fits all'.
Well within the capabilities of a new ACCA, I'm sure.