Has anyone purchased an EV as director?

Time

Apologies if this is covered in detail somewhere already i had a look and could't find anything. I'm trying to find out what peoples experiences have been in purchasing a fully EV as a director. I know there's no BIK, and the capital cost can be written down over several years (or one with the accelerated allowances scheme), and the VAT is reclaimable, but am i missing anything apart from that.

I'm interested in hearing peoples experiences as to how efficient they people found it to be? Have you encountered any issues with revenue/the amount you've written off against tax etc..?

Zenith74

Time wrote: »

the VAT is reclaimable

I'm curious about this, I'd never given it much thought and just assumed the VAT was maybe reclaimable on vans only. However the Revenue site (https://www.revenue.ie/en/vat/reclaiming-vat/how-vat-on-passenger-motor-vehicles-can-be-reclaimed..aspx) states that VAT can be reclaimed on passenger vehicles used for >60% business use.

I wonder about this part though - "You can reclaim a maximum of 20% of the VAT on qualifying passenger motor vehicles."
Pretty sure that reads as you can only reclaim 20% of the VAT paid on the car, so 20% of the 23%. Not insignificant, but not as exciting as being able to reclaim all the VAT

To answer your question, I have not done it yet but am giving it serious consideration for the next EV and have spoken to my accountant about it a couple of times... One thing to consider is that you can buy the car off the company at some point if you want it, you obviously cannot pick a ridiculously low figure, but it could be on the lower end of the market value I'm sure...

MightyMunster

Looking at doing this myself, waiting to test an ioniq next week. All running costs paid by the company, tax, insurance, tyres service etc..

Hadn't heard about the vat.

Calahonda52

What sort of director: proprietary in a close company or ?

Zenith74

Calahonda52 wrote: »

What sort of director: proprietary in a close company or ?

Curious what difference this makes, what would be the advice for somebody who is and somebody who isn't a proprietary Director?

One thing that stands out to me, is that as a proprietary Director you probably have the flexibility to pay yourself quite a generous mileage allowance, to the point that it may still be better to buy the car personally and claim mileage.

Calahonda52

Zenith74 wrote: »

Curious what difference this makes, what would be the advice for somebody who is and somebody who isn't a proprietary Director?

One thing that stands out to me, is that as a proprietary Director you probably have the flexibility to pay yourself quite a generous mileage allowance, to the point that it may still be better to buy the car personally and claim mileage.

Not at all: Revenue will impose the Civil Service rates, you don't want to get their attention as a proprietary director billing inordinate mileage expenses

https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx

Zenith74

Calahonda52 wrote: »

Not at all: Revenue will impose the Civil Service rates, you don't want to get their attention as a proprietary director billing inordinate mileage

https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx

Sorry to be clear, I meant the civil service rates; they’re quite generous compared to what many companies pay!

Any chance you can answer the question though, I’m curious :-)

Gumbo

Zenith74 wrote: »

Sorry to be clear, I meant the civil service rates; they’re quite generous compared to what many companies pay!

Any chance you can answer the question though, I’m curious :-)

Civil service rates are quite low compared to private in my experience.

https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx

Maybe not low as such, but not generous either. I was getting €1 a km in the private sector.

Zenith74

kceire wrote: »

Civil service rates are quite low compared to private in my experience.

https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx

Maybe not low as such, but not generous either. I was getting €1 a km in the private sector.

Interesting, wonder how they got away with that! Revenue state that private companies must “use rates not higher than Civil Service rates”.

Calahonda52

We don't do advice here
https://www2.deloitte.com/ie/en/pages/deloitte-private/articles/taxation-company-directors.html

sets out some things to consider.

If you have a smallish company from a tax perspective and you claim ACA on the EV generating a tax loss
[VAT is not my area..] and if you create a big refund with the VAT on the EV
Don't be surprised if you get some additional attention.

There are also of course restrictions on what mileage can be claimed: Revenue have done a lot of work on scrutinising mileage claims for self employed and proprietary directors.

nim1bdeh38l2cw

kceire wrote: »

Civil service rates are quite low compared to private in my experience.

https://www.revenue.ie/en/employing-people/employee-expenses/travel-and-subsistence/civil-service-rates.aspx

Maybe not low as such, but not generous either. I was getting €1 a km in the private sector.

When was this? Civil Service rates dropped a lot a few years ago. If you were getting more than the prevailing civil service rate at the time, you'll find yourself liable for BIK in the event either you or the company is audited.

gizmo555

Time wrote: »

... the VAT is reclaimable ...

VAT is only reclaimable for passenger vehicles if:

1. The vehicle is stock-in-trade (e.g., for a motor dealer);
2. It's used for car hire, or;
3. It's used for driving lessons.

It would not be reclaimable for a company buying an EV for a director or employee to use.

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