Transfering personal finance car to business

I plan to purchase a vehicle on personal finance (in the first instance) as a brand-new company is almost impossible to obtain finance on, let’s say the financial provider is happy for me to do what I want with the vehicle so long as I do so after paying their debt i.e. actually transferring the vehicle into the company once I clear the debt. The car will be used 100% for business

Let’s say the purchase price of the car is £60,000 and only qualifies for 8% capital allowance due to emission. However, this is irrelevant as I will explain below.

The car will be purchased on a four year PCP contract, i will put down £20k and will have monthlys of £500 and a balloon of £21k which is when the transfer of ownership takes place.

I from inception of my company and the date I take out the car on finance, have an agreement with my company that I intent to transfer over the vehicle to my company once the finance has been settled in full via my personal employment salary and the income generated from the sale of the car which will take place by my company over a fixed term of say three years.

In terms of accounting treatment, in the first instance, this will be shown as an Asset in the company and Director loan equating to zero until the company makes money to pay off the debt as well as my personal savings.

The company will have the intent to sell the car on a rent to buy basis, let’s say the car is bought for £60k, I will do a rent to buy for £90k over a three-year term for chauffeur drivers, so effectively the overall company will make a £30k profit but over a three-year period.

I will cover the cost of maintaining the vehicle such as services, insurance MOT and PCO registrations so COS will be more than just the car, but to keep things simple in the pro-forma P&L lets assume that the company makes £10k profit per annum based on selling price vs purchase price.

I will inject money into the company to clear off the finance sooner rather than later to avoid high interest costs, so COS will also include interest.

Is this treatment correct?

The reason I ask is because I know my approx. profit is £30k on the life of the car it doesn’t make sense for me to include £30k sales and say £2k of cost of sales (interest), then capital allowance of £5k and pay tax on £22k profit each year which not actually true profit is.

Also, what would be the correct SIC Code for this type of business?

In my personal self-assessment, I assume I do not need to recognise any income until the director loan has been settled by my company in full?

Is this treatment correct?

Lets say i dont rent to buy and was to rent it out, say the rental income and sale of the vehicle over a three year term is £100k, the car cost me £60k plus interest. However, if i use the capital allowance methodolgy and only deducting interest will mean that i will pay more tax then actually what the true profit is?