Company Car Tax Explained UK - April 2020 & Beyond

🔴 There are several ways to gain company car tax relief, including methods such as getting a pool car or buying/leasing a fully electric or hybrid PHEV vehicle with a long electric range...... Accounting & Tax Academy Free Membership Site → 🌏 http://aidhanfinancial.com/accounting... HMRC Company Car Tax Calculator: http://cccfcalculator.hmrc.gov.uk/CCF... Comcar Company Car Tax Calculator: https://comcar.co.uk/companycar/tax/c... ⏱️ Time Stamps: 1:32 - Should you lease or buy a company car through your limited company? 2:30 - The limited company tax implications of a company car. 3:22 - The personal benefit in kind (BIK) implications of a company car. 4:17 - A useful company car benefit (BIK) calculator. 09:23 - What About VAT? 10:00 - How to Pay 0% Tax On Your Company Car 11:10 - What's The Alternative To Buying or Leasing A Company Car? 11:30 - Recap If you want my & my team's expert accounting and tax help, you can book a discovery call through our website → 🌏 https://www.aidhanfinancial.com/ If you are operating through a Limited Company then the tax efficient way of getting a company car is simply to get one with very low or 0 Co2 emissions per g/km. The higher the Co2 emissions per g/km, the more onerous company car tax becomes for both the company and particularly you the user personally. A benefit in kind charge is essentially a tax levied on you personally, for using a business asset like your company car for personal use. HMRC's stance is that most business assets used personally by the owner or employees should be taxed as a benefit in kind. The benefit in kind charge is computed as follows: P11D Value (list price + optional extras, VAT & delivery) x BIK rates x Co2 g/km emissions A key consideration aside from company car tax is cashflow, whether to buy a car outright or to lease it through what is known as an operating lease. There are different tax implications for each route explained in the video. As a business owner, if buying or leasing a company car does not add up for you, then you can use your personal vehicle for business usage and claim Mileage Allowance Payments. For the first 10,000 business miles, you can claim 45p per mile, and 25p per mile for any miles over and above. You can physically withdraw this money from your company tax free, there is no BIK charge and your company can offset this for corporation tax relief. We've done a video on the Mileage Allowance Payments as follows: 🔴    • How To Claim Mileage Allowance Expenses - ...   At present, in the 2020-21 tax year, in order to pay 0% company car tax (and no benefit in kind) is to get a fully electric vehicle that naturally has Co2 emissions of 0 g/km or a low emissions (less than 50 g/km) plug-in hybrid vehicle that has a range in excess of 130 miles on a single charge. From the 2021-22 tax year the BIK rates will increase but still remain very low. VAT differs between cars bought outright and leased through an operating lease. In general, if you use your car for 100% business use then 100% of the VAT is reclaimable. For lease plan cars, if there is any personal use then only 50% of the VAT on monthly lease rentals can be legitamatly reclaimed. As mentioned in the video, PHEV vehicles registered before the 6th April 2020 do not qualify for 0% BIK tax. ★☆★ OUR MISSION ★☆★ Me & my team are dedicated to helping and empowering YOU to 'Know Your Numbers' so you can make calculated and informed decisions in your business, company and personal finances towards your definition of success. ★☆★ OUR PHILOSOPHY ★☆★ If you take care of your numbers (finances), your numbers will take care of you, your family and those you value the most. 🔴 DISCLAIMER Our videos are for general guidance, education and empowerment in helping you understand accounting, tax and your numbers. They in no way constitute specific advice to your specific circumstances. Me & my team would be delighted to help you with your specific queries or accounting requirements through a formal engagement. #companycartax #companycar #mileageallowancepayments