Any accountants in the house that can help?

Here’s the situation, looking at the most cost effective way to get a new (or newer) more vehicle for myself, and at the same time am happy (in fact would like to) use it to promote the business so would have it partially sign written. Here’s the facts…

-Business is VAT registered
-I do circa 10-12k miles per annum, 3-4k of those miles are business miles (which I currently charge the business 45p per mile for as I use my own car right now).
-Currently running a 10yr old BMW 3 series touring that’s lovely to drive, but starting to cost a fair bit to keep on the road. I would sell this privately and pocket the cash (it is my own car) which would be especially useful right now as supposed to be going to SA soon to visit the GF’s father she’s not seen for years!
-I’ve been looking at leases for circa £200+VAT per month, on cars that are 35-30% more economical than my current car so would reduce my annual fuel bills by maybe £350-400.
-I have one full time employee (other than myself), and 2 part timers, any of which may need to use the car once in a while.
-Would partially signwrite the car with business logo’s, web address, phone number etc.

Having looked into it, the most cost effective way to get a new car would be to claim it as a pool car, but sadly I think as most evenings it would be sat on my own drive rather than at my place of work, part of the pool car criteria wouldn’t be met. I do work from home probably 12-15hrs per week though (unavoidable part of being self employed I guess!), so would my drive at home then count as being a place of work?

Basically, I could go out and get a new car personally, and continue to charge the business milage at 45p per mile to my business, but that seems like I’m missing a trick. I don’t want to enter into the realms of it being my own company car, because then effectively I’d be paying for it twice (as I own the business).

Any advice gratefully appreciated in advance…

If the car is on your drive you can’t claim it as a pool car or deny personal use to avoid the company car tax shenanigans.

Having it sign written also won’t get you any discount as it’s marketing, I spoke with the inland revenue about my company car and they have heard it all before from what I could gather from the responses.

Your most effective way to get a new car would probably be to take out a company lease presuming you are VAT registered to claim the VAT back?

Are you “on call” in the evenings? I.e. Do customers ever call you out of hours and expect you to turn up to sort something?

Personal lease is going to set you back roughly £2800 all in.
45p p/m will return you £1800 (4k)
So you’re down BUT no liability re company car tax. etc.
Company leases it, reclaims VAT, pays fuel, etc.
You get car BUT get taxed on BiK.
You can offset some of that by not letting the company pay for personal mileage(fuel) but there is still some penalty as you have the car available for personal use.

Last time we did it – we got business leases, reclaimed the VAT, servicing, etc.
No BiK as I had access to own car and bikes – just make sure you keep a log of “business mileage” – its amazing how many of those shorts trips come under it and they soon add up…..
Oh – and obviously our clients sometimes need us to turn out in the middle of the night for emergencies 😉

I’m assuming your limited and wanting to avoid P11D benefit. In which case stating the car is a pool car when you’re taking it home most nights won’t wash with HMRC.
Advertising on cars to claim the full VAT as a business asset doesn’t work either as HMRC will normally argue that the vehicle is predominatly used for transporting yourself and the advertising is incidental. Plenty of people tried this and been tripped up with it, see VIT44000.
Trading business address where your employees work and correspondence is sent to is where you would claim your business mileage from and what you are attempting is blatant mileage claim for commuting.
If you are looking at a lease car you will be restricted to 50% of the VAT charged, the remainder will be added to the cost of the car lease. Depending on the emissions of the car will have an effect on the corporation tax too.
This too applies to the P11d benefit in kind you will suffer and the Class 1A NIC the company will pay. Comcar will give you a good guide to the tax costs of a particular car.
If you’re not needing the extra seats a commercial vehicle i.e. van may be suit your tax requirement better and the benefit in kind even with fuel paid by the company will be cheaper than most cars less the smallest most efficient ones. Again too many seats, not enough load carrying capacity and HMRC will dispute it so ensure it is qualifying before committing to any lease.

Whether you’re trading as a limited company or a sole trader/partnership will have a very significant impact on the rules/what you can get away with. Start there. But if you’re limited ie an employee, commercial vehicle is the only practical way to avoid a P11d implication inmy experience.