Advantages/disadvantages of buying a company car?

tacofries

Hi Everyone,

I am a founder of an early stage startup private limited company. I am on the road a lot of days and so am going to have to bite the bullet soon and buy a car. The vast majority of the car's use will be for business purposes.

I am wondering should I personally lend the business €6000 to the buy the car or should I just purchase it myself? Looking to find out the up and downsides of whichever way I might buy it.

If I lent the business the money to buy it would that mean that I could no longer buy the car privately? Also if the business bought it would the company be entitled to any money back from revenue like is the case with Vat?

The business is currently pre-revenue however we will be generating turnover in about 8 months time. Our financial year runs till August 2017.

Thanks for any advice!
Taco

Immy

If the company owns the car you have to pay BIK which is a percentage, based on your annual mileage of the original value of the car when new. Max percentage is 30% and it can reduce if your mileage is high.

VAT cannot be claimed back on passenger motor vehicles

As a director you can claim mileage at the civil service rates.

I would say in your situation buy the car yourself and claim mileage.

bmwguy

You can buy a commercial vehicle and not pay BIK at the same rate. There is a small BIK rate for something like your expenses getting to and from work which I am not 100% sure of but I'm sure some of the fine folk here will.

tacofries

Thanks guys, looks like I will just buy it nyself so!