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Where Taxpayers and Advisers Meet

Company Car NIC

Matthew O
Posts: 16
Joined: Sun Jan 18, 2009 10:45 pm

Company Car NIC

Postby Matthew O » Mon Nov 06, 2017 10:58 am

Morning all,

I have a director / only shareholder who is older than 65

She is getting a new lease car and for any costs to her, she has asked me to gross up her salary and raise it. Assume it's 40%

She has asked me to find the most cost efficient method to the company, either by;

- Company Purchase of the car - Gross adjustment for BIK, or,
- Individual purchase - Gross Salary adjustments for repayments

A couple of areas I would like to check?

NIC is not paid by the employee because
- employees do not pay NIC on BIK?
- employees over 65 do not pay NIC?
- Does this differ for a director / only shareholder?

Lease Purchase payments are allowable for corporation tax?

Any help would be gratefully appreciated.

Regards

Matthew

tinners93
Posts: 4
Joined: Wed Dec 06, 2017 9:58 am

Re: Company Car NIC

Postby tinners93 » Wed Dec 06, 2017 10:12 am

Employees do not pay NIC on BIK?
No NIC due on the BIK for an employee, just C1a for the employer.

Employees over 65 do not pay NIC?
No C1 or C2 contributions needed once you hit state pension age.

Does this differ for a director / only shareholder?
A director is an employee of the therefore no difference.

Lease Purchase payments are allowable for corporation tax?
Depends on the CO2 emission of the car, more than 130g/km then 15% is disallowable. As of April 18 the g/km will be reduced to 110.


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