Accountants help needed !

Just wondered if there are any accountants on here? Had my company car stolen and looking for a new one. We previously had the car on a PCP deal where we can write the value down in the books over time.

Been looking at a new car on a monthly rental scheme where you just pay the monthly sum and never own the car. We have been told that doing it this way you cannot write down the asset so you have the full liability over the time you rent it!

Is this correct or is there a way that you can alter this? Monthly payments for the rental one are much cheaper on the same car!

Many thank for any advice in advance.

The rental would be an “expense” though so you may be able to write off the full amount instead of a depreciating asset.

The previous car had capital allowances against it which depending on the emissions would be less than what you’d be allowed as an expense through the profit and loss when leasing a car.
The capital allowances are calculated on a reducing balance so the longer you own the car the less the capital allowances claimed.
If you’re VAT registered remember that you can only claim 50% of the VAT with the remainder of the VAT added to the lease expense reducing your profits further and tax payable.
The P11D benefits would be unchanged whichever method you used.

Craigxxl,

Does that apply with the rental one? Sorry very green on tax. Company pay for the rental of the car and I am taxed with benefit in kind.

By rental I assume you mean leased in which case yes it’s a benefit in kind calculated on emissions and list price plus extras.
If it is an ad hoc rental for a few days here and there then their is no benefit in kind.
Both expenses are shown on the profit and loss. Lease car 50% VAT, hire car 100% VAT.

It would be a leased car where a monthly sum was paid for it. So if it is pcp you can devalue 100% where as only 50% for leased?

A PCP is a form of hire purchase were you are financing a car to purchase with a big payment at the end. The asset (car) is then yours until you sell it/get it stolen. During this time it depreciates through use but this isn’t allowable for tax so you are allowed capital allowances instead at a fixed rate to write off the asset on a reducing balance.
A lease is basically a long term hire contract were you don’t own the car but are responsible for it. The lease costs can be claimed against the profit and loss but only 50% of the VAT can be claimed i.e. lease cost is £200 plus £40 VAT you’d post £220 to the profit and loss as an expense and claim back £20 VAT.