EV car purchased with ltd company

Can I purchase EV car though company, what if there is no trade happening in coming years

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Hi, As a director of the company I am planning to buy EV car via Hire Purchase, as I will be using for personal pruspose as well I will not claim any VAT will pay the BIK and tax.

What if my current contract job wont extend, and I might end up taking permanent job. Will I be eligible to keep the car? Any queries I can expect from HMRC? Any advice please.

 

-

Sam

Replies (8)

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By paul.benny
03rd Mar 2024 15:31

Of course Company can keep the car. Whether that's the right thing to do is another matter.

If your work status changes, can Company keep up the repayments? What will Company do with vehicle once HP is repaid in full? Etc

Your accountant will be able to give proper advice that takes account of your full circumstances - so I recommend you consult him/her.

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Replying to paul.benny:
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By samsaccount
03rd Mar 2024 16:25

Thank you.
My company has enough funds for the repayments. Probably after the HP is finished I might sell the car.

my accountant said that should be fine, but I wanted to check online so that I am not missing anything here.

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Replying to paul.benny:
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By samsaccount
03rd Mar 2024 16:25

Thank you.
My company has enough funds for the repayments. Probably after the HP is finished I might sell the car.

my accountant said that should be fine, but I wanted to check online so that I am not missing anything here.

Thanks (0)
Replying to samsaccount:
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By paul.benny
03rd Mar 2024 17:42

Far better to rely on your accountant than me.

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Replying to samsaccount:
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By FactChecker
03rd Mar 2024 18:31

"Probably after the HP is finished I might sell the car. my accountant said that should be fine"

Presumably that's not a wholly accurate reflection of the conversation between you and your accountant ... who may have reminded you that you (an individual) and the company are two discrete entities - and the former can't sell a car that doesn't belong to that individual?

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Replying to samsaccount:
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By DKB-Sheffield
03rd Mar 2024 18:48

samsaccount wrote:

but I wanted to check online so that I am not missing anything here.

There are lots of things you may be missing - most of which are unknown to a public forum. You may be more reassured that your accountant has considered the potential implications to you, and your business - than a forum provided with the scant facts of your OP.

FWIW I assume your accountant will have considered...
- whether interest is allowable (for tax) on the HP in the event trading ceases
- that the ultimate sale will likely result in a (taxable) balancing charge
- whether the provision of the car will be justifiable remuneration for a non-trading company
- that the car will be an asset of the company in the event of any liquidation
- that sale of the vehicle to you (if you chose that) will be at MV - with potential balancing charge
- etc...

All of the above may be relevant, may not, but certainly couldn't be considered - in full - in here.

It sounds harsh but, if you don't wish to take your accountant's word for it, you should seek a (paid for) second opinion. That is someone who, armed with ALL of the facts, can review and comment. 'Checking online' is not the way to obtain such a second opinion.

Thanks (5)
DougScott
By Dougscott
03rd Mar 2024 16:39

If it's a NEW EV and you purchase/hire purchase it (NOT lease it) then you can claim 100% First Year Allowance whereas if it's second hand EV you can only claim 18% capital allowances per year on reducing balance method. This would make a difference if there is no trade in following years.

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DougScott
By Dougscott
03rd Mar 2024 16:45

Also make sure the HP is in the name of the company, the company pays for everything including insurance etc.

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