[isleaiw1]

Son in law starting a new job - can have any car he wants up to £50k list (as long as they sell it). Clever financing approach means no company car tax and private fuel paid so economy not really an issue. They have a little one so a back seat is required and he golfs so a decent boot helpful.

So what would you choose?

And the £50k list is fixed - not one penny over!

[NotGotABimmer23]

340i / s4 / c43 all in estate form would be top of my list. If hes not able to add mppsk it may remove the bimmer from the running.

Nothing better sub 50k imo.

[....,,,,..,,..]

As I was looking at one earlier, what about a 540i xdrive ?

Plenty space to plan ahead.

[isleaiw1]

Originally Posted by kylemacca01

340i / s4 / c43 all in estate form would be top of my list. If hes not able to add mppsk it may remove the bimmer from the running.

Nothing better sub 50k imo.

C43 and 440i been mentioned. My daughter has been driving my car today and noted that it was noisy so not sure MPPSK would be appreciated. S4 has also been mentioned but as I have an Audi can't see that happening....

M2 fits price limit. Something left field like a Focus RS also does....

[JD6]

Given that they are imposing a list price limit, I would be tempted to look at cars where the list price isn’t vastly more than the real price, so that rules out BMW Audi or Mercedes. How about a Macan S?

[isleaiw1]

Originally Posted by Brigand

As I was looking at one earlier, what about a 540i xdrive ?

Plenty space to plan ahead.

Has a 530d now - wants a change...

Did I mention he only has to keep it 6 months and the depreciation is minimal (yes, the job is with a car dealer chain)...

[davyk31]

Depends I guess on what brands his employer sells?

[NotGotABimmer23]

Originally Posted by Brigand

As I was looking at one earlier, what about a 540i xdrive ?

Plenty space to plan ahead.

Over 50k

[....,,,,..,,..]

Originally Posted by kylemacca01

Over 50k

Under £50k if not brand new.

Any car.

[JD6]

Originally Posted by isleaiw1

Clever financing approach means no company car tax and private fuel paid so economy not really an issue.

Some of these 'clever' schemes can seem less clever in hindsight if the tax authorities work out what's going on, as rather a lot of IT contractors, broadcasters etc can attest.

[isleaiw1]

Originally Posted by Brigand

Under £50k if not brand new.

Any car.

Got to be brand new. any make they sell. havent found any yet except Volvo that they dont (well, not that he would want!)

[isleaiw1]

Originally Posted by JD6

Some of these 'clever' schemes can seem less clever in hindsight if the tax authorities work out what's going on, as rather a lot of IT contractors, broadcasters etc can attest.

They are a large car retailer - the scheme is HMRC approved and recognises that they can provide cars at different costs to a normal employer. no risk to employee.

[creepy coupe]

440i with toys. Coupe or Gran Coupe

[A15X]

440i convertible, I can get my 8 month old in the back no issue and boot is a good size.

6 months would take him thru summer then change for colder months?

[JD6]

Originally Posted by isleaiw1

They are a large car retailer - the scheme is HMRC approved and recognises that they can provide cars at different costs to a normal employer. no risk to employee.

Given that there is 'no company car tax and private fuel paid', while they may have found a loophole to exploit, it seems likely that they will close it at some point, and HMRC do have a history of moving the goalposts on tax avoidance schemes retrospectively. The broadcasters, IT contractors I referred to also believed that their schemes were entirely legitimate and approved at the time.

[isleaiw1]

Originally Posted by JD6

Given that there is 'no company car tax and private fuel paid', while they may have found a loophole to exploit, it seems likely that they will close it at some point, and HMRC do have a history of moving the goalposts on tax avoidance schemes retrospectively. The broadcasters, IT contractors I referred to also believed that their schemes were entirely legitimate and approved at the time.

There is tax on the private fuel - on the amount you use, as is always the case when you use your own car for work.

No tax on car as privately owned - tax is on the finance that they provide for you to buy one, so you pay tax on the interest that you are not paying.

Personal Service companies are a whole different kettle of fish, been there, studied IR 35 and can see very clear evidence that the BBC contracts dont satisfy requirements....

[JD6]

Originally Posted by isleaiw1

No tax on car as privately owned - tax is on the finance that they provide for you to buy one, so you pay tax on the interest that you are not paying.

I'm not an accountant and I believe that you are. However if they have in effect arranged free finance via an interest free loan, and the employee doesn't pay for the depreciation, this suggests that something isn't quite normal about this arrangement. If you look through the convoluted structure, as HMRC tend to in the long run, it sounds a lot like a company car.

What is there to stop most companies doing the same, so that their employees could all avoid paying tax on their company cars? It sounds like this doesn't pass the smell test...

[isleaiw1]

Originally Posted by JD6

I'm not an accountant and I believe that you are. However if they have in effect arranged free finance via an interest free loan, and the employee doesn't pay for the depreciation, this suggests that something isn't quite normal about this arrangement. If you look through the convoluted structure, as HMRC tend to in the long run, it sounds a lot like a company car.

What is there to stop most companies doing the same, so that their employees could all avoid paying tax on their company cars? It sounds like this doesn't pass the smell test...

I am an accountant, yes but not a tax specialist!

In the old days, garages used to provide staff with cars of varying types and there was a benchmark car which they got taxed on - and when it was based on engine size and stuff it was simple. My brother worked for a Pug dealer and his company car for tax was a 106 1.1 but i never saw in him anything less than a 405....

when the rules changed and it was based on price and emissions and stuff, then something different was needed. You get taxed on the cost of your employer providing all other benefits (PHI, etc) and so I think the car chains have gone for a similar approach with HMRC as cars are different to them, they are ultimately stock to be sold on. So I presume it works on basis that the cost to the employer is difference between cost to them and what it can be sold for secondhand, which if they can show is not a cost then there is no taxable benefit... But that is supposition on my behalf...

Anyway its HMRC approved and whilst they can move the goal posts later, they cant change it for the past. He may have to change how it works in future he can take advantage now.

Convertible wont take golf clubs apparently....

[davyk31]

Interested in the financial arrangements as I do have a decent knowledge of company car tax and this doesn't all sound quite right. HMRC will take regard of the benefit given to an employee and its value. In this case he is essentially being given a free car it seems, HMRC will want their cut of what they see as his taxable benefit.

[isleaiw1]

Originally Posted by davyk31

Interested in the financial arrangements as I do have a decent knowledge of company car tax and this doesn't all sound quite right. HMRC will take regard of the benefit given to an employee and its value. In this case he is essentially being given a free car it seems, HMRC will want their cut of what they see as his taxable benefit.

I'll check the details and report back - he had only just heard last night when we were talking about it and I was trying to listen to him and do five other things...

Is the tax man interested in you getting a benefit or your employer incurring cost? I get hotel rooms at F&F rate - which is a massive benefit to what you pay but not taxable as an approved scheme with HMRC....

I think technically he buys the car and runs the risk on depreciation but the discounts are enough to mean it shouldnt lose much if at all in the period...

whatever, he will have a better car than me, for alot less money.....

[Watsey]

Having negotiated with company car fleet leasing providers I can confirm that these arrangements do exist and the operators confirm that they are compliant with HMRC requirements.

My clients weren't interested in these arrangements, however, from memory the employee is paid a higher all-inclusive repeating (typically monthly) expense based upon miles driven per period (rather than the employee receiving a car allowance or company car, and then just charging a rate per mile for business mileage i.e. 15ppm). The higher expense rate includes the full operating costs of the vehicle, including the lease. The employee avoids BIK because he/she is receiving expenses, not a company car on which BIK would be due. I expect there's also an employer 'dodge' due to not paying Employer's NI on the expense payments.

It's almost certainly a loophole that HMRC will close due to lost tax revenues. Advice to SiL : enjoy it while you can !

[isleaiw1]

Originally Posted by Watsey

Having negotiated with company car fleet leasing providers I can confirm that these arrangements do exist and the operators confirm that they are compliant with HMRC requirements.

My clients weren't interested in these arrangements, however, from memory the employee is paid a higher all-inclusive repeating (typically monthly) expense based upon miles driven per period (rather than the employee receiving a car allowance or company car, and then just charging a rate per mile for business mileage i.e. 15ppm). The higher expense rate includes the full operating costs of the vehicle, including the lease. The employee avoids BIK because he/she is receiving expenses, not a company car on which BIK would be due. I expect there's also an employer 'dodge' due to not paying Employer's NI on the expense payments.

It's almost certainly a loophole that HMRC will close due to lost tax revenues. Advice to SiL : enjoy it while you can !

Well it seems we got it wrong - because he gets two cars!

one is taxed and he gets private fuel for - that just turns up and gets swapped every couple of months. Second doesnt get taxed because he gets an interest free loan to buy at cost on a pcp over three years where he just funds the depreciation versus cost price....