Used car via LLP?

[simplicityrules]

Hi all,

I am a partner in an LLP and am about to buy a ‘new’ car. My challenge is simple – I don’t want to lease a new, ‘cheaper’ car – I’d much prefer to get an older, but more luxurious car. It will be used about 50% for business, 50% for private use. I know that as a partner in an LLP there is no BIK.

By way of example, on a 3+ 35 deal at £300 pcm I could lease a nice Golf or similar. This is what our accountants do – the partners in the LLP drive Golfs & Audis and the LLP picks up the lease costs, insurance, maintenance and petrol (not mileage) and claims back the VAT as appropriate.

However, a similar amount via an HP arrangement would allow me to get for example a £70k (when new), 5 year old luxury car – e.g. a BMW 6 series – that is something that meets my requirements much better. And of course, it doesn’t add another car to the already burgeoning roads...

For a non tax professional, this appears difficult but on a ethical level, I believe it more appropriate for us to recycle cars and re-use nicer, older cars rather than buy new every 3 years.

Any advice and guidance on how I could potentially buy (recycle!) a used car via the LLP in a tax efficient manner that is acceptable to HMRC would be much appreciated.

Thanks in advance!

[tom 7000]

I have a 645ci )

You add up the operating cost of the two cars ie fuel insurance etc this goes in the llp and for tax purposes, if you use the car 50% for work, 50% of the costs are tax deductable. The more you spend the more the tax deduction but the worse off you are ie spend 100 save £20 tax you have spemt 80 ...spemd 200 save 40 tax you have spent 160. Cars are emotional assets, consider what the other partners say is llp policy consider what you want, does your spouse really want to be seen in a 6 series convertible? etc etc

On the capital side its hp or lease and they both have their various complications for tax. Overall for a car purchase the general rule of thumb is price it up under both optins and take the cheapest, the tax will come out in the wash.

Tom

[simplicityrules]

Thanks Tom - useful advice. Will keep searching for the Holy Grail and of course, the right car. 645Ci lovely btw!