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Company Assets

Posted by Elise_1104 PM | on Wed, 02/05/2012 - 17:39  407 | report

I need to calculate whether it is worth the limited company retaining two motorbikes as a fixed asset or the director buying them from the company and at what value that would be cost effective in terms of CT versus SA.  My calculations are as follows.  Are they right???  Many thanks Claire

 

Bike 1  £   £   £   £   £   £                 
                             
If Disposal proceeds :         1,000         2,000         3,000         4,000         5,000         6,000                
                             
WDA adjustment            200            400            600            800         1,000         1,200                
P & L Costs             250            250            250            250            250            250                
Class 1a NIC            208            208            208            208            208            208                
Taxable profit adjustment            658            858         1,058         1,258         1,458         1,658                
Corporation Tax @ 24%            158            206            254            302            350            398                
                             
                             
Asset Value         6,300         6,300         6,300         6,300         6,300         6,301                
Taxable benefit @ 20%         1,260         1,260         1,260         1,260         1,260         1,260                
Additional Running Costs            250            250            250            250            250            250                
Total Taxable benefit         1,510         1,510         1,510         1,510         1,510         1,510                
Tax @ 20%            302            302            302            302            302            302                
                             
Tax Gain/(Loss) -          144 -            96 -            48                 0               48               96                
                             
Bike 2  £   £   £   £   £   £   £   £   £   £   £   £   £   £ 
                             
If Disposal proceeds :         1,000         2,000         3,000         4,000         5,000         6,000         7,000         8,000         9,000      10,000      11,000      12,000      13,000      14,000
                             
WDA adjustment            200            400            600            800         1,000         1,200         1,400         1,600         1,800         2,000         2,200         2,400         2,600         2,800
P & L Costs          1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000
Class 1a NIC            545            545            545            545            545            545            545            545            545            545            545            545            545            545
Taxable profit adjustment         1,745         1,945         2,145         2,345         2,545         2,745         2,945         3,145         3,345         3,545         3,745         3,945         4,145         4,345
Corporation Tax @ 24%            419            467            515            563            611            659            707            755            803            851            899            947            995         1,043
                             
                             
Asset Value      14,732      14,732      14,732      14,732      14,732      14,732      14,732      14,732      14,732      14,732      14,733      14,734      14,735      14,736
Taxable benefit @ 20%         2,946         2,946         2,946         2,946         2,946         2,946         2,946         2,946         2,946         2,946         2,947         2,947         2,947         2,947
Additional Running Costs         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000         1,000
Total Taxable benefit         3,946         3,946         3,946         3,946         3,946         3,946         3,946         3,946         3,946         3,946         3,947         3,947         3,947         3,947
Tax @ 20%            789            789            789            789            789            789            789            789            789            789            789            789            789            789
                             
Tax Gain/(Loss) -          371 -          323 -          275 -          227 -          179 -          131 -            83 -            35               13               61            109            157            205            253