It is the second most popular question we get asked here at Adams Moore, after, what would you do in my situation?

Should I lease or buy my company vehicle?

In terms of tax, this is what you should do.  If it is a company car and it is new and 100% electric then buy the car; even if you have to take out hire-purchase finance to ease cash flow. The reason for this is the full cost of the car will be deducted from your profits, and you will save at least 19% off your Corporation Tax bill. Then also put all the running costs through the company.

If the car is not 100% electric, then do not buy the car through the company. Buy or lease it personally and then charge mileage claims back to the company at 45 pence per mile, up to 10,000 miles. This is because the P11d charge is far higher than any tax savings.

If you are considering owning a commercial vehicle, then the advice is the same as the electric car. In addition, you can claim the VAT back on a commercial vehicle, if you are VAT registered, and don’t forget to claim the running costs through the company.

Finally, if you are buying the vehicle through the company, then you will need to complete a P11d return.

Of course, when you are thinking of changing your vehicle then please contact us first here at Adams Moore.  We are here to provide you with total support for you and your business.