Rules for used EV card purchase

Can I purchase an EV through my ltd company, if there isn't much trade.

Didn't find your answer?

My ltd company now does not sell services, there is only an income of bank interest ~£5k per year.

I do spend a few hours per week developing a new product.

Can I purchase a second hand EV, around £10k-£15k, for personal use? My understanding is that I can claim 18% of the price off my corporation tax bill, then just 2% BIK cost for my self assessment.

I may sell the car in a few years time.

 

Thanks

Replies (21)

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By FactChecker
17th Jun 2024 22:36

What "corporation tax bill"?

Anyway, for some strange reason I'm not desperately keen for taxes paid by me being used to subsidise your lack of contribution ... so suggest you at least pay a professional to advise you on which bits you've understood and which not.

Thanks (7)
DougScott
By Dougscott
18th Jun 2024 08:17

Yes, probably.

Thanks (0)
Replying to Dougscott:
DougScott
By Dougscott
18th Jun 2024 10:06

But as others have said if you are not actually trading (which earning bank interest isn't) then probably not!

Thanks (1)
paddle steamer
By DJKL
18th Jun 2024 09:00

BIK will likely be 3% in 25/26, 4% in 26/27 and 5% in 27/28.

Not sure what Trade you have , if there is no trade how do capital allowances assist you to reduce CT on interest received ?

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Replying to DJKL:
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By kssidhu7
18th Jun 2024 09:16

I will make ~£5k profit from bank interest
So I will have CT on that.

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Replying to kssidhu7:
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By Leywood
18th Jun 2024 09:18

You need to read what people are saying.

Better still, appoint an Accountant to help you understand, because you clearly dont.

This is not a free tax advice line.

Thanks (3)
Replying to kssidhu7:
paddle steamer
By DJKL
18th Jun 2024 09:37

That is NOT a trade, that is a Non Trading Loan Relationship Credit

Thanks (1)
Replying to kssidhu7:
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By Paul Crowley
18th Jun 2024 15:13

You really need to learn about CT or get an accountant.
Interest received is not a trade.

Thanks (0)
Replying to Paul Crowley:
paddle steamer
By DJKL
18th Jun 2024 15:42

Can be if you are a bank/loan shark.

Thanks (1)
Replying to Paul Crowley:
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By kssidhu7
18th Jun 2024 17:21

Yes I understand, this is my first year with an interest paying bank
I will check with a professional what I'm allowed
I spend about 5 hours a week at the moment working on building a new product (software), but it will take a long time to develop...

Thanks

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Replying to kssidhu7:
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By FactChecker
18th Jun 2024 17:53

"I spend about 5 hours a week at the moment working on building a new product (software), but it will take a long time to develop..."

Uh, so who is 'investing' in building this new product ... you or 'your' ltd company?
Those are two distinct entities, and your answer can have *major* consequences downstream if the product is completed and becomes successful.
Note: you can't change your answer retrospectively in a few years time, so yet another reason why you should be urgently appointing an accountant (or at least a professional business/tax advisor).

Frankly what you do or don't do with regard to an EV may be insignificant when compared to all the other things you may be unwittingly walking into.

Thanks (3)
Replying to Paul Crowley:
By Ruddles
18th Jun 2024 18:44

Paul Crowley wrote:

You really need to learn about CT or get an accountant.
Interest received is not a trade.


Agree on the first part. Re the second, so what? Capital allowance claims are not restricted to trade activities.
Thanks (1)
Replying to Ruddles:
DougScott
By Dougscott
18th Jun 2024 19:37

Well you'd have to be able to show that the vehicle was used in the general running of the company and if the company wasn't actually doing anything other than collecting interest on a bank account there may be some difficulty showing this, but the OP has now revealed that the company is actually delevoping software so that makes a difference in my view. Anyway the main point is that the OP would be well advised to not be a cheapskate and take proper professional advice instead of potentially cocking things up.

Thanks (1)
Replying to Dougscott:
By Ruddles
18th Jun 2024 19:56

I was simply making the point that CA's are available to companies other than trading companies, notably investment companies. Whether that would apply to a company doing nothing other than holding cash is another discussion. There just appears to be too much focus on 'trade' in this thread.

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Replying to Ruddles:
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By Mr_awol
19th Jun 2024 14:23

Agreed, and i was considering making the point myself. Not that I'm overly keen to be particularly helpful tot he OP, but trading status isnt always the be-all and end-all (and may well not be in this case)

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By SteveHa
18th Jun 2024 10:30

And don't forget that the BIK is based on the value of the car when new, and not the second hand value that you pay for it.

Thanks (2)
Replying to SteveHa:
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By kssidhu7
18th Jun 2024 17:18

Yes I understand this, thanks

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VAT
By Jason Croke
18th Jun 2024 17:40

YJKiWBaITC

Thanks (1)
Replying to Jason Croke:
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By FactChecker
18th Jun 2024 17:58

Please put me out of my misery (or stop my revolving brain) ...
.. I presume that BaITC is be (or beat) an IT consultant - and YJ is You just - but KiW has defeated me?

Thanks (3)
Replying to FactChecker:
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By Tax Dragon
18th Jun 2024 18:55

Know/knew it would?

Thanks (2)
VAT
By Jason Croke
18th Jun 2024 19:02

Together you have solved the cryptic puzzle! It was a little joke/twist on the usual WISWTM (who is supplying what to whom) mantra we often see here at Accounting Web.

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