If you are a limited company director looking for a business car, why not consider a low emission car? Besides contributing to saving our planet by lowering your carbon foot print, you could save money on corporation tax as well!
In addition to these corporation tax savings, you could also qualify for a 100% first year capital allowance, allowing you to offset the cost of the investment against taxable profits during the tax year in which you purchase the car. This applies to new cars purchased for business with a CO2 emission of less than 95 grams per km or electric cars which are also exempt from road/car tax.
With regards to ‘benefits in kind’ for company cars, an electric car with no CO2 emissions whatsoever, will accrue no benefit in kind charge at all. A low emission car which emits 120 grams per km CO2 or less, will have a benefit in kind charge of 10% of the list price if it is a petrol car and 13% if diesel.
Besides the tax efficiencies, having a low emission car would also mean an exemption to the London Congestion Charge, generally lower premiums when purchasing car insurance, lower running costs and no fuel tax for those with electric cars or less fuel tax for those with hybrid cars.
You can further the benefits of not just a low emission car but a company car in general. If you are purchasing a company car, have it branded with your company name and/or logo and contact details. This will not only be non-stop publicity for your business as you drive around the town and country but can also improve your IR35 position. Having a branded company car is excellent proof that it is definitely for business use and it also shows that you have spent a significant amount of money promoting your company, and thus acting as a genuine business.
If you are considering purchasing a low emission car or even a standard company car, speak with your account manager today. They will be more than happy to assist you with your individual needs and advise appropriately.
What Legal Issues Might Contractors Face?
From tax investigations to client disputes and defamation
Does Length Of Contract Impact Your IR35 Status?
Should contractors be wary about working for a client over a long period of time?
What Do Our Contractor Accountancy Packages Include?
All your accountancy needs and more, for one fixed fee.