Company Director- Purchase company car or continue claiming mileage

[Rossdarragh]

I have a ltd company of which I'm a director along with my wife. I'm a full time employee while my wife is part time taking a small wage. She's on job share as a teacher the rest of the time. We both have private cars and claim mileage.

We are looking at purchasing a company car through the company for myself but trying to weigh up does it make sense to do so. I do 45k to 50k kms per year for which I have been claiming mileage driving a 171 Skoda superb with 170k on it. Looking at buying a Kodiaq. If I keep the Superb for another year the mileage will be high on it and am reluctant to purchase a new private car with our own money.

Any advice on whether it makes sense to buy a company car and if so how to structure it. There is cash in the company to do so.

Also is my wife entitled to a company car as a part time employee but at the same time is being paid a small weekly wage? I know BIK might be an issue in this regard.

 

[T McGibney]

The answer depends to a large extent on your personal circumstances, lifestyle and preferences. BIK is high on a company car but it's nice to have your company bear it and all the other costs rather than having to pay for everything yourself. You should probably be discussing this with your accountant.

 

[cremeegg]

As a rule of thumb, if you want to maximise your driving pleasure, run an expensive new car, then let the company own it and it takes the hit on the depreciation.

If you want to maximise your wealth drive a low cost older car, you own it and claim back the milage.

Anything in the middle is marginal either way.

 

[Brendan Burgess]

Great summary cremeegg

Brendan

 

[Zenith63]

Might be worth considering an EV if buying through the company. If you can charge it at home you'll save significantly on 'fuel' costs. The Skoda Enyaq is basically an electric Kodiaq. Unfortunately the 0% BIK regime is coming to an end but it's still fairly favourable for the next few years -

"BEVs qualify for a 0% Benefit-in-Kind rate up to €50,000 without mileage conditions. This will be extended out to 2025 with a tapering effect on the vehicle value. This measure will take effect from 2023. For BIK purposes, the original market value of an electric vehicle will be reduced by €35,000 for 2023; €20,000 for 2024; and €10,000 for 2025."

Suitability will very much depend on home charging and the make-up of that annual mileage. 300km/day would work well, 400km+ could be a bit painful in the longrun.