BIK on EVs.

air

12.5% of the 15k or whatever you sell it for I would say. Not familiar with the "non trading rate" and not a taxation professional!

Water John

I presume, unless the Govn't cancel this BIK that you can keep going with it in the Co or the Co can trade it in against an upgrade?

air

Of course, you'll just have to pay BIK if it becomes liable for it.

grogi

slicedpanman wrote: »

Walking through the figures then;
Let's say 30k out of the co, co pays tax and maintenance for 3 years then sells car to me.
Reasonable 50% depreciation after 3 years, so I put 15k back into my co and take ownership of car.

But I need to pay CT out of co on remaining value: what's remaining value in that case? 15k? And what rate of CT? 12.5%? Or the 25% non trading rate?

Pay yourself the money as the salary.

air

Yeah, obviously you can just pay the PAYE/PRSI on the 15k and the car is yours (personally).

PickYourName

slicedpanman wrote: »

Walking through the figures then;
Let's say 30k out of the co, co pays tax and maintenance for 3 years then sells car to me.
Reasonable 50% depreciation after 3 years, so I put 15k back into my co and take ownership of car.

But I need to pay CT out of co on remaining value: what's remaining value in that case? 15k? And what rate of CT? 12.5%? Or the 25% non trading rate?

I think best to speak to your accountant on this - it's something of a minefield, and not one for speculation by non-experts (me included!).

I do think though that this is one case where a PCP makes complete sense, both from the point of view of cash management and the flexibility it offers.

You can decide at the end of the three years what to do next (BIK may be changed for example), and there's no arguing over the residual value of the car. You could just hand the car back, or have the company pay the balance, or you personally purchase (out of taxed income).

I'd definitely take professional advice on it, though, especially on the treatment of other related costs (car tax, insurance, maintenance etc.). I'm not sure if a PCP is considered a lease with a purchase option, for example. If it is, there may be some element of VAT that is claimable. You should also check the rules (if any) around who the car is registered to, as this can affect insurance.

BoatMad

A company car cannot be registered in the name of a director. That's makes it a personal car.

Insurance would be taken out by the company in the normal way , it is typically somewhat more expensive then a purely private insurance.

Note that for a BEV you can also avail of 100 % capital allowance Which allows you to write off the cost of the car against corporate tax, something that isnt possible for a ICE company car.

Typically if at the end of the period , you want to transfer the car to the employee , the cost is typically the book value and the employee pays that to the company.

Where significant differences exist between the market value and the book value , revenue have a provision to claw back tax from the employee , but in practice it rarely happens unless it looks contrived.

BoatMad

slicedpanman wrote: »

Walking through the figures then;
Let's say 30k out of the co, co pays tax and maintenance for 3 years then sells car to me.
Reasonable 50% depreciation after 3 years, so I put 15k back into my co and take ownership of car.

But I need to pay CT out of co on remaining value: what's remaining value in that case? 15k? And what rate of CT? 12.5%? Or the 25% non trading rate?

If it's a low emmisuons vehicle , the company can claim 100% capital allowances, hence avoiding any CT issues

If the car is " sold" to you at the end , al, that happens is the employee pays for it from taxed income. If you the company give yourself ( the employee ) the car for no consideration , then in effect income tax at the appropriate rate must be deducted from the employees salary equivalent as if you gave that employee the cash equivalent of the book value of the car

BoatMad

slicedpanman wrote: »

Ok guys I'm one of those small company owners (myself and the missus company directors in 2 person self employed co) possibly in the market for a car next year...

I really get the point of spending 30k on a car and effectively costing 15k to us. What I'm interested in is after 3 years (assuming bik is gone for all 3) what's the tax/cost implications of selling the car to ourselves?

Assuming it will have to be a realistic market value after 3 years? What kind of depreciation would be allowed/acceptable?

Also on tax/insurance for the company car... as owned by co does co have to pay tax/insurance/servicing?

If I lost 3 years of insurance in my own name I'd have to factor that into calculations.

Intention is to buy a car (new or second hand) and keep it for 10+ years

It makes no sense to have you as the employee pay for servicing etc , as this will in effect be done out of net salary.

The usual situation is the user of the car pays zero towards any aspect of the costs.

Yes you will loose the benefit of personal insurance and you may find company car insurance is more expensive , but the tax benefits will make it all worth while

air

The 100% CT allowance can be claimed on the purchase but CT will still have to be paid on the remaining value if it is ever disposed of. Otherwise you could buy a car, claim the credit and dispose of it immediately, having paid no tax on the purchase price - which wouldn't make much sense obviously.

Did anyone get any info on the insurance implications of moving from privately owning/insuring a car to going through your company?

I'm waiting for my insurer to come back to me with answers. The main questions are:
- Will it cost more? How much?
- How does it affect your NCD if you revert to private ownership in a few years (e.g. if the BIK does not remain at 0%)

Shefwedfan

Deleted User wrote: »

Did anyone get any info on the insurance implications of moving from privately owning/insuring a car to going through your company?

I'm waiting for my insurer to come back to me with answers. The main questions are:
- Will it cost more? How much?
- How does it affect your NCD if you revert to private ownership in a few years (e.g. if the BIK does not remain at 0%)

You need to be named on the policy and you have some chance.

I moved to company car, when I moved they said that I would be named on the policy. It was over 4 year contract and I never checked. When I moved off the company car it turned out after year 1 they moved to just insure the car. I wasnt named

When I tried to get my insurance, it was disaster, most companies would not even quote. Even my old insurance company which I had been with for 10+ before said they could not quote.

Finally I got Blue Insurance at a massive price. I now have the grand total of 1 year no claims.....when renewing I was restricted again as most companies would still not quote

ted1

I had my own policy the a company one for ten years, only 25plus.ie would give me a partial NCD for named company driver

However they all gave me a NCD for being named on my wife’s policy. So if you can be named on a regular policy it’ll help

So I mailed Chill, asking about the price and NCD.

Price: sales team won't quote, go directly to insurance company/companies.

NCD: "...once you forfeit the NCB into a company name, you can’t change it back generally speaking. It is up to the insurer if they will accept it, but normally, this isn’t accepted."

:eek:

That would be a major catch. I had been increasingly minded to go for this early next year. However, say the 0% BIK lasts five years (the commitment is '3 to 5 years'). After that, BIK makes owning any company car unattractive again so I'd switch back to personal ownership and insurance. If insurance then cost 2k or something for a couple of years, it would undo a lot of the benefit of this incentive.

Please tell me I'm wrong! I was all set to do this in Feb - buy 2nd hand Leaf through, sell current car (cash in my own pocket). Oh save and the environment from carbon and those particulate thingies that diesel engines spew..

EndaHonesty

Re: EV company cars and 0% BIK

Has anyone looked at importing a used Tesla S from the UK.

They're available for approaching £40k now and VAT qualifying are available too for another saving to a VAT registered company.

How much would VRT be on a 2014 Tesla S?

cros13

EndaHonesty wrote: »

How much would VRT be on a 2014 Tesla S?

€2k - 3.5k depending on spec and mileage.

Mc-BigE

"VAT qualifying are available too for another saving to a VAT registered company."

not sure about the vat on a company car, i thought it was only for commercial vehicles , vans trucks etc.

cros13

cros13 wrote: »

€2k - 3.5k depending on spec and mileage.

5k discount on VRT

grogi

Deleted User wrote: »

5k discount on VRT

€2-3.5k VRT after taking the discount into account... :rolleyes:

grogi

grogi wrote: »

€2-3.5k VRT after taking the discount into account... :rolleyes:

OoooOOOhhh

Jaysus.

EndaHonesty

Mc-BigE wrote: »

"VAT qualifying are available too for another saving to a VAT registered company."

not sure about the vat on a company car, i thought it was only for commercial vehicles , vans trucks etc.

Do you know what VAT Qualifying means?

Or are you not sure about that too? :rolleyes:

Mc-BigE

EndaHonesty wrote: »

Do you know what VAT Qualifying means?

Or are you not sure about that too? :rolleyes:

enlighten me

EndaHonesty

Mc-BigE wrote: »

enlighten me

So you commented on it without knowing what it was?

Strange...

Mc-BigE

Lots of people comment on stuff on here all the time and are not experts in that field or backup what they say with facts etc.
so why are you busting my balls ??

Ive done some digging (to try to enlighten myself;)) on revenue.ie and on this forum

looks like (ps im not an expert) that vat is reclaimable on certain passenger vehicles, but not all.

Vat on commercial vehicles is reclaimable
and vat charged on UK Vans sold to irish Vat registered LTD companies should be sold Vat free.

links:
https://www.revenue.ie/en/vat/reclaiming-vat/how-vat-on-passenger-motor-vehicles-can-be-reclaimed..aspx

https://www.boards.ie/vbulletin/showthread.php?t=2055136128

EndaHonesty

Mc-BigE wrote: »

Lots of people comment on stuff on here all the time and are not experts in that field or backup what they say with facts etc.
so why are you busting my balls ??

Ive done some digging (to try to enlighten myself;)) on revenue.ie and on this forum

looks like (ps im not an expert) that vat is reclaimable on certain passenger vehicles, but not all.

Vat on commercial vehicles is reclaimable
and vat charged on UK Vans sold to irish Vat registered LTD companies should be sold Vat free.

links:
https://www.revenue.ie/en/vat/reclaiming-vat/how-vat-on-passenger-motor-vehicles-can-be-reclaimed..aspx

https://www.boards.ie/vbulletin/showthread.php?t=2055136128

This is a thread on BIK on EVs, so company cars.

If a VAT registered Irish company buys a VAT qualifying used car from a VAT registered company in the UK, for business use in Ireland, then the Irish company is entitled to buy the car net of VAT.

Mc-BigE

EndaHonesty wrote: »

If a VAT registered Irish company buys a VAT qualifying used car from a VAT registered company in the UK, for business use in Ireland, then the Irish company is entitled to buy the car net of VAT.

do you have any links to revenue.ie or similar for the above?

well if this is the case, then it makes perfect sense to buy a used model S from UK and import it in here as a LTD company

Will Tesla UK allow you to buy one from their website/showrooms in UK and export it to Ireland? (or is it none of their business once you buy it)

I suppose the main issue would be getting Irish finance verses Tesla's own finance/leasing/pcp options here in Ireland once (if) they start selling used ones over here.

An Irish bank will be looking for 8-10% APR plus for any company loans you take out before traveling to the UK.

verses Tesla Irelands own Finance on a new one currently 5.85% apr (assuming they would give you that rate on an irish used one at Tesla Ireland in the future)

Is the insurance issue not scaring off more people or am I being overly negative? The incentive is strong in the short term but if you were starting from scratch insurance-wise at some point in the future, it would be a nightmare.

EndaHonesty

Mc-BigE wrote: »

do you have any links to revenue.ie or similar for the above?

well if this is the case, then it makes perfect sense to buy a used model S from UK and import it in here as a LTD company

Will Tesla UK allow you to buy one from their website/showrooms in UK and export it to Ireland? (or is it none of their business once you buy it)

I suppose the main issue would be getting Irish finance verses Tesla's own finance/leasing/pcp options here in Ireland once (if) they start selling used ones over here.

An Irish bank will be looking for 8-10% APR plus for any company loans you take out before traveling to the UK.

verses Tesla Irelands own Finance on a new one currently 5.85% apr (assuming they would give you that rate on an irish used one at Tesla Ireland in the future)

It's not an issue for the Irish Revenue but the UK Revenue & Customs.

Sales of goods from a UK VAT registered company to another EU VAT registered company are called dispatches.

The explanation is here;

https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad

I don't know about buying Tesla UK approved used cars for export to Ireland. But I'm trying to find out.

slicedpanman

Deleted User wrote: »

Is the insurance issue not scaring off more people or am I being overly negative? The incentive is strong in the short term but if you were starting from scratch insurance-wise at some point in the future, it would be a nightmare.

You're not the only one... I too think that the insurance setback will wipe out any savings - if you intend to take personal ownership of the car effectually.

I think this benefit is only a real benefit for people who were getting a company car anyway

Water John

This might be good news. Dawning on all that Ev's are the future for reducing emissions.

https://www.irishtimes.com/news/environment/electric-cars-key-to-cutting-ireland-s-carbon-emissions-esb-says-1.3303434

Is this electric vehicle covered by the new rules? (In case you can't click, it's an electric flying car!)

Spoke to my accountant. He says 'Do it, do it if you can at all.' Pretty much the biggest tax break around bar topping up pensions.

However, I'm yet to crack the insurance thing. Awaiting a quote from a broker as AXA and Chill both advised that they don't do direct business for company car insurance. Have no clue whether it's going to come back at some extortionate rate or what.

A friend - who is not an accountant - reckons you can depreciate the car over five years so it's worthless as a company asset by the time the '3-5 year' BIK exemption runs out (if it runs out at all). Then the company either keeps it or sells it to someone for a euro.

KCross

Deleted User wrote: »

Spoke to my accountant. He says 'Do it, do it if you can at all.' Pretty much the biggest tax break around bar topping up pensions.

However, I'm yet to crack the insurance thing. Awaiting a quote from a broker as AXA and Chill both advised that they don't do direct business for company car insurance. Have no clue whether it's going to come back at some extortionate rate or what.

The insurance is a worry alright. Back to paying €2k+ for insurance would take the good out of the whole thing.

Is it possible at all to take insurance on a car thats not in your name?

What about buying a €50 car and insuring that to maintain your NCD? It would be a waste of money from the point of view of having a car insured that you don't use but if the BIK advantage (thousands) minus the few hundred for 3rd party insurance on a €50 car puts you in positive money territory maybe that would be an option?

Deleted User wrote: »

A friend - who is not an accountant - reckons you can depreciate the car over five years so it's worthless as a company asset by the time the '3-5 year' BIK exemption runs out (if it runs out at all). Then the company either keeps it or sells it to someone for a euro.

Its better than that actually. You can depreciate it all in year 1 as long as the car is on this register....
https://www.seai.ie/energy-in-business/accelerated-capital-allowance/

Wowsers. My plan for a 2nd-hand Nissan Leaf just got upgraded!

KCross

Deleted User wrote: »

Wowsers. My plan for a 2nd-hand Nissan Leaf just got upgraded!

Well, read the fine detail. I think it has to be new.

Yeah, but if you can depreciate it in one year then I'm getting a new one. Or a freakin' Tesla

air

The company can depreciate it in year one for sure but tax has to be paid on the remaining value when it's disposed of. Plus you're only saving 12.5% corporation tax anyway so not a massive benefit.

Ah, I see - thanks.

So, can you depreciate it over five years and consider it to be worth zero at the end? Then sell it to your brother for a euro?

air

You can do that for sure but I wouldn't fancy your chances in a revenue audit, you have to dispose at market value.

Roger.

Sound advice, thanks. I did sound a bit too good to be true.

Otherwise, buy two (or 10, if you could) 50k cars and sell them next year for 35k each!

Back to reality: it's still sensible enough to buy a new Leaf or other modest vehicle, providing the insurance issue doesn't become too complex.

Denisoftus

How many years without insurance enough to lose your NCD? If I, lets say, come back to private with one year gap, would they still not take into account previous 5+ years NCD?

Denisoftus

Not many brokers/companies insure company car, from what it looks like, can someone suggest a decent broker to deal with? When car is not a VAN or not for moving goods, a lot say no

bp_me

Denisoftus wrote: »

How many years without insurance enough to lose your NCD? If I, lets say, come back to private with one year gap, would they still not take into account previous 5+ years NCD?

Typically your private NCB has a two year expiration date.

air

If your partner has a vehicle insured privately also you could take turns being the primary driver each year and keep both your ncbs current.

Denisoftus

air wrote: »

If your partner has a vehicle insured privately also you could take turns being the primary driver each year and keep both your ncbs current.

You are reading my mind

air

I can't claim credit for the idea unfortunately, a friend of mine did it for years while they had only one car, he's back to 2 cars now and it worked a treat.
He mentioned that there was a bit of explaining on the phone each year at renewal time but no major hassle.

slicedpanman

air wrote: »

If your partner has a vehicle insured privately also you could take turns being the primary driver each year and keep both your ncbs current.

I thought you had to be the legal owner of the vehicle to be the primary on the policy?

air

slicedpanman wrote: »

I thought you had to be the legal owner of the vehicle to be the primary on the policy?

Your partner can own it also, have seen the wording on my own documents previously, but obviously check with your own company first.

Water John

I think insurance is more about, the primary driver, not owner.
Surely, if any insurance co is interested in business, this scheme is an opportunity.

BoatMad

with insurance, there must be an " insurable interest ", You typically cannot insure a vehicle owned by another legal entity as you are not the insurable entity

Nor in general can you have two insurances covering the same vehicle

Hence the owner is the insured interest , who drives it is another situation entirely

Note the issue of loss of NCD is being over stated , Most insurances will give you a discount to account for years under a company policy , yes its not an NCD but the nett effect is similar, I have transferred between the two a number of times

air

BoatMad wrote: »

with insurance, there must be an " insurable interest ", You typically cannot insure a vehicle owned by another legal entity as you are not the insurable entity

This is true, however in practice many Irish insurers accept your spouse's ownership as an insurable interest.

123.ie wrote:

is registered in the Republic of Ireland in your name or in the name of your spouse. (Spouse means legally married husband/wife or legally recognised Civil/Cohabiting Partner)

Liberty Insurance wrote:

Yes, you can insure a vehicle registered in your own name or the name of your spouse, civil partner, parent, common law partner or a lease company. If the vehicle is registered to anyone else we cannot provide a quote.

Aviva wrote:

Your car is owned and mainly driven by you or your spouse/partner

In the event that one's insurer of choice doesn't allow this, it wouldn't cost anything to transfer ownership over and back to your spouse each year. It would add previous owners to the vehicle obviously.