New company car

[CarbonGTD]

The boot litre capacity is slightly better in the BMW 330e saloon than the Merc C class PHEV saloon (but both are less than their non-hybrid equivalents as they both have raised shelves in the boot).  You would need to check them out in the flesh to see if they meet your requirements or are just too restrictive.

The fact is with these new hybrid 3 series/C Class, they really make sense ONLY for company car drivers because of the compelling 5% company car benefit rate (compared to around 20% for a Golf GTD/BMW 320d etc).  It's a pure numbers game - in other respects the hybrid electric Golf GTE, BMW 330e and Merc C lass are all compromised/less than ideal - but if you can't/don't want to opt out of a company car scheme and take the cash, then the ultra low bik rate makes them impossible to ignore without careful consideration.

[ffrank]

Thanks for the responses guys. I don't have an allowance as such. I'm the director of the company so I can have pretty much whatever I want, but I'm not a greedy. Plus the more money I spend on a car the less profit I make.

A saloon is fine as long as the litre capacity is a decent amount. I did look at the new A4 but it has a £20k options list!

Have you considered buying privately and then just paying yourself 45p a mile? Nearly always works out better and is what I do as a self employed limited company.

[JBirchy]

Thanks for the responses guys. I don't have an allowance as such. I'm the director of the company so I can have pretty much whatever I want, but I'm not a greedy. Plus the more money I spend on a car the less profit I make.

A saloon is fine as long as the litre capacity is a decent amount. I did look at the new A4 but it has a £20k options list!

Have you considered buying privately and then just paying yourself 45p a mile? Nearly always works out better and is what I do as a self employed limited company.

That's pretty much what I do. I take a monthly allowance and then buy privately and pay myself mileage. That way, I don't need to worry about company car policy or mpg.

[fredgroves]

If you buy out of your own pocket, you pay 40% tax on the money you use to pay for the car...

And your business can't claim back the VAT

[JBirchy]

If you buy out of your own pocket, you pay 40% tax on the money you use to pay for the car...

And your business can't claim back the VAT

Of course, there are pro's and con's. For my situation the accountant worked it out in both ways and advised it was better to buy personally. BIK rates, dividend, salary, income tax, she took it all into account.

I'm sure for a low power, low BIK rate vehicle it would be better to go down the company route.

[matchboy]

If you buy out of your own pocket, you pay 40% tax on the money you use to pay for the car...

And your business can't claim back the VAT

He might not be VAT registered though.  In any case, its still better to have your own car rather than a company car, that's the cheaper way (in most cases).  Also, you can actually buy the car you want, rather than compromising and getting something because it fits into a lower BIK bracket (as in general the lower the tax on a company car the more dull it is!)

[matchboy]

the accountant worked it out in both ways and advised it was better to buy personally.

Beat me to it! 

[JBirchy]

If you buy out of your own pocket, you pay 40% tax on the money you use to pay for the car...

And your business can't claim back the VAT

In any case, its still better to have your own car rather than a company car, that's the cheaper way (in most cases).  Also, you can actually buy the car you want, rather than compromising and getting something because it fits into a lower BIK bracket (as in general the lower the tax on a company car the more dull it is!)

Exactly that. We are VAT registered but are still only a small company so it works out better for us to do it personally. Plus, I really don't want to have to go diesel. I'm hoping for a BMW 340i M-Sport next time round so I don't think that would work very well for BIK!

[ffrank]

If you buy out of your own pocket, you pay 40% tax on the money you use to pay for the car...

And your business can't claim back the VAT

He might not be VAT registered though.  In any case, its still better to have your own car rather than a company car, that's the cheaper way (in most cases).  Also, you can actually buy the car you want, rather than compromising and getting something because it fits into a lower BIK bracket (as in general the lower the tax on a company car the more dull it is!)

I'm actually flat rate VAT registered, so I don't claim VAT back - and make some profit on VAT instead, which works well for a small services company. But I'm not sure you are allowed to claim VAT back on a car anyway?

My 'car allowance' is effectively 0% personal tax rate as it paid through a dividend, which makes it hard to beat!

Exactly that. We are VAT registered but are still only a small company so it works out better for us to do it personally. Plus, I really don't want to have to go diesel. I'm hoping for a BMW 340i M-Sport next time round so I don't think that would work very well for BIK!

The 340i is on my radar too, have you been able to see one Jon? I want to test drive one (manual preferably), but no luck so far.

I literally just got home from driving it's rival - the Jag XE S. Was awesome, sounds great - although quieter in the cabin than I expected. Best thing was the instantaneous power from the pedal - part in thanks to the supercharger and part in thanks to me being used to a turbo diesel  Discounts are much better on the BMW, but the spec is lower and the Jag holds it's value better so it's not such a huge difference. Jaguar sales team were very cool, have told me pick it up for a 24hr loan when it's dry (was soaking wet today).

[remlapeel]

I currently lease my R privately and claim 45p a mile back as suggested, but I do 20k mile a year so always get hit at the end. Also because the business is doing really well I'm dropping down to 4 days so my mileage claim won't exceed the cost of the car. Along with a few other reasons it works better to put it through the company this time. I go for one extreme to the next with cars. I was looking at a C63 AMG earlier......I really need to get out and test drive some cars.

I have decided if I get a family car, I will be getting some sort of sports car in a few years as a second car