New EV

cloughy

Hi there,

I have my own limited company and am considering buying an EV, to replace an 08 Corolla Verso, and I know there are significant Tax advantages in buying an EV,

I have the following questions in relation to buying an EV through my company:
1. I see that the company can claim accelerated capital allowances (up to €24,0000 in the year of purchase against Taxable profits, is this for both new and second hand EV's
2. there is 0% BIK on the users of the car, so that the company can pay all Road Tax, Insurance, Maintenance etc. and this is available until the end of 2021, is this only for New EV's or can this 0% BIK be applied if I purchased a 2nd hand EV.

We are a 2 car family, the Verso 1.8 Petrol and a Prius (09), and its the Prius that gets most of the day to day driving, as I cycle to work, and the Prius is used for school runs, sports, and then at the weekend both cars are in operation for family activities.

am I mad to be looking at changing the Verso, its still goes, only has circ 85k miles on the clock, but the tax is high, and costly to fill, and not worth much but then the tax advantages of company buying the EV and the running costs got me thinking about changing. What do you think ?

If I was looking at EV's what would you suggest, we are a family of 4, 2 boys and we cycle a bit, so need space either for bike in the car or a car that can take bike rack. Our journeys are fairly short, but dureing the summer would increase as go from Dublin to the south for family holidays, and involves a few trips up and back, but the distance is circ 200m each way.

Thanks in advance, and think looking for a test drive or EV is on the cards, as we both love the Prius,

Shefwedfan

1. Used and new
2. Used and new

As far as I am aware but someone else will confirm

Any electric you do look at will be smaller than the Verso. Do you need the space? You will find once you go electric it gets used for everything because it is so cheap.

I would probably do it the other way around. Keep the Verso for holidays and swap the Prius. You have probably lost all the value out of the Verso at this stage.

Car wise, well anything depending on your budget. Most of your trips would be short burst, like myself, so most cars will suit your needs in terms of range

So you have
Leaf 1 (24kWh and 30kWh)
Leaf 2 (40kWh)
eGolf 1 (26kWh)
eGolf 2 (36kWh)
Ioniq (40kWh)
Zoe(might be a bit small but it comes in 22kWh & 40kWh)
Merc something....a few on carzone.
Kona (64kWh) bloody crazy money(38k)

KCross

Shefwedfan wrote: »

1. Used and new

I think that might be wrong. The SEAI website says:

The equipment purchased must be new and bought for use in a trade. It cannot be leased, let or hired to any person, body or organisation.

Shefwedfan wrote: »

Any electric you do look at will be smaller than the Verso. Do you need the space? You will find once you go electric it gets used for everything because it is so cheap.

I would probably do it the other way around. Keep the Verso for holidays and swap the Prius. You have probably lost all the value out of the Verso at this stage.

Car wise, well anything depending on your budget. Most of your trips would be short burst, like myself, so most cars will suit your needs in terms of range

I agree. The prius is doing the most of the driving at the moment. Swap it for the new car and use the Verso when you need the space.

Shefwedfan

KCross wrote: »

I think that might be wrong. The SEAI website says:

The equipment purchased must be new and bought for use in a trade. It cannot be leased, let or hired to any person, body or organisation.

I agree. The prius is doing the most of the driving at the moment. Swap it for the new car and use the Verso when you need the space.

Yeah I probably was wrong on first one....sorry OP......

Sabre Man

Tesla Model S has great range and a boot big enough for a bike and other stuff. We carry two foldable electric bikes.

You may be able to supercharge in Ballacolla during your holidays depending on where in the soutth you go.

cloughy

Thanks for the replies,, food for thought, its the 650 road tax tgat i was thinking of getting rid of, as the Prius is only 190, but maybe you are right to look at the EV to replace the prius.

I was unsure on the capital allowances and BIK, as it will be company buying best to get 0% BIK and also full write off against company corporation tax. Will reread both of these regulations.

Think Tesla is out of the equation due to cost and only write off 24k against the company income, not to mention BIK on value over 50k.

Shefwedfan

The eGolf has a bike rack attachment for the boot. After that I have no idea.

The Kona has the option for a roof rack to take bikes but as mentioned it ain't cheap.

No idea on the Leaf. Most electric cars will not allow for a hitch to get added, if you do then the warranty gets broken. So just to keep that in mind

cloughy

Both cars running fine, and petrol costs are not too extreme, but it was the tax angle i was thinking about, as effectively getting 12k off new price and company pay all expenses so more savings.

Am i mad and just keep driving the 2 cars as they owe us nothing an no real value if we were to sell them. Road tax for verso is up end Jan but NCT tilk Next Dec, hence why was thinking of changing before pay another 650.

Shefwedfan

cloughy wrote: »

Both cars running fine, and petrol costs are not too extreme, but it was the tax angle i was thinking about, as effectively getting 12k off new price and company pay all expenses so more savings.

Am i mad and just keep driving the 2 cars as they owe us nothing an no real value if we were to sell them. Road tax for verso is up end Jan but NCT tilk Next Dec, hence why was thinking of changing before pay another 650.

You will get nothing selling the Verso. It is probably worth more to you than selling it plus it is a bigger car for those weekend trips. That's was my point.


The Prius would probably hold value simple because it is cheeeaaappp tax which seems to be all people think about when buying car. Also at the moment hybrids are big so you should get decent value.



If you end up with Prius and BEV you will have two smallish cars with limited space for those holidays. Also te Prius will end up spending most of its life sitting in the driveway because you will use the electric


I have a Galaxy and eGolf. The Galaxy could sit up for 2-3 weeks when we are on holidays because we use the electric for everything, all the shorts hop. The Galaxy is used for the big holidays but really is a waste of an expensive car.



I know the tax is expensive on the Verso but I would guess it is cheap to insure etc because the value of the car is smallish.....you could sell today for 1k, in 5 years time you could sell and probably still get 1k if you know what I mean....

Sabre Man

Could you make do with a Zoe or a Leaf for local trips and keep one of your current cars for bikes and longer trips?

cloughy

Thanks all, lots to think about, as could keep both cars going, was just wondering whether worth changing to avail of the tax breaks, as know neither car is worth a lot, but cost of running them not excessive either.

The prius is an 09 so not much if were to sell/trade in, but would you consider it to get a new EV car, with 12k off the price due to using company to buy it, wonder what net cost to change would be vs keep as is.

KCross

cloughy wrote: »

... with 12k off the price due to using company to buy it...

How did you calculate that 12k?
ACA won’t give you 12k off.

cloughy

KCross wrote: »

How did you calculate that 12k?
ACA won’t give you 12k off.

Buy new car, and write 24k off against company income, and as i take all income from company would save 12k personal tax, have new car to drive and all motoring costs paid by the company.

I know there could be a balancing charge if ever sold but if kept for a good few years could be quite small.

Other option is me buy the car but would cost 28k of after taxed income, so via company seems the best route, even if i dont technically own it.

Am i wrong in.my take on the above?

KCross

cloughy wrote: »

Buy new car, and write 24k off against company income, and as i take all income from company would save 12k personal tax, have new car to drive and all motoring costs paid by the company.

I know there could be a balancing charge if ever sold but if kept for a good few years could be quite small.

Other option is me buy the car but would cost 28k of after taxed income, so via company seems the best route, even if i dont technically own it.

Am i wrong in.my take on the above?

I dont think its that simple.
The ACA scheme doesnt save you money as such, it just improves cashflow by allowing you to write it all down in year 1 rather than over the usual 8yrs.

And lets say you write down €24k in year 1. Thats not €24k saved off your corporation tax. It 12.5% of €24k in year 1 and nothing thereafter.

So, lets say the company makes €100k pre-tax profit. Instead of paying 12.5% on €100k you reduce your profit by the €24k so you then pay 12.5% on €76k. So, the saving to the company isnt €24k.
You get what Im saying? Thats my understanding of how it works.

Also, when you buy an EV via a company you dont get the full SEAI grant. They reduce it to €3800 rather than €5k. So factor that in too.

You will, as you said, save money on tax, insurance etc as well as the fact its not coming out of your net pay. Thats a significant saving there alright but the company still has to find the €30k to buy it which means less profit for the company. Although company insurance can also be more expensive than private insurance because it will cover commercial use so might be worth getting a quote for that.

Its a complex set of variables!

The real savings for EV is in the fuel. If you do alot of miles then the savings on diesel are large (good rule of thumb is ~80% reduction). You should focus your figures there.

Before forking out for a new EV I'd run it by your accountant!

cloughy

Thanks for the detailed reply and more food for thought and didnt consider the insurance might be highter.

I take everything out of the business as its a IT consultancy i have, so dont pay any CT but Income Tax, so the way i was looking was following:

Example ignoring tsx bands and allowances, and say 50% tax, USC, PRSI

Company income 100k, pay all as salary so i end up paying say 50k tax and then have 50k net salary to fund a car or

Company income 100k buy car ACA 24k means 76k salary paid, pay 38k Tax and have 38k net salary and full use and 0 expense for running a car.

Question is if 12k less net salary and having a new car and all costs allowed from the company a better use of company income, rather than paying more income tax.

MightyMunster

cloughy wrote: »

Buy new car, and write 24k off against company income, and as i take all income from company would save 12k personal tax, have new car to drive and all motoring costs paid by the company.

I know there could be a balancing charge if ever sold but if kept for a good few years could be quite small.

Other option is me buy the car but would cost 28k of after taxed income, so via company seems the best route, even if i dont technically own it.

Am i wrong in.my take on the above?

That's how I understand it too,for a car costing 24k: instead of being paid 12k and paying 12k in tax you get paid 0k and spend the 24k on car, so as you said it costs you 12k of after tax income for a car worth 24k.

Charlie-Bravo

How much mileage do you do with your current car? You've probably worked this out yourself already. Obviously claim a mileage allowance (must be correctly recorded) and if you're doing a massive amount of miles, you could own the car yourself, and have the allowance actually pay for it. If you can, avoid getting a hire-purchase or PCP agreement, as this eats your own money.

cloughy

I dont do a lot of work miles, and as my wife is also a Director and employee, so she would be the one using the car so that I can still claim the miles.

This year its probably 1,500 miles, but could claim this by using the other car, so the total would be about €1,200 in milage, so can still claim that by using the other car.

rolion

Can you claim petrol/diesel mileage allowance on an electrical car !?
I remember somewhere back of my mind,maths is done based on the car engine'CCs and mileage ...

slave1

rolion wrote: »

Can you claim petrol/diesel mileage allowance on an electrical car !?
I remember somewhere back of my mind,maths is done based on the car engine'CCs and mileage ...

Of course you can, each company can have whatever policy they want and as long as they are not higher than "Civil Service" rates etc then they are not taxable.
You should rephrase though from petrol/diesel to travel rates and an EV would be in lowest band as it is less than 1.2L

spakman

cloughy wrote: »

Thanks for the detailed reply and more food for thought and didnt consider the insurance might be highter.

I take everything out of the business as its a IT consultancy i have, so dont pay any CT but Income Tax, so the way i was looking was following:

Example ignoring tsx bands and allowances, and say 50% tax, USC, PRSI

Company income 100k, pay all as salary so i end up paying say 50k tax and then have 50k net salary to fund a car or

Company income 100k buy car ACA 24k means 76k salary paid, pay 38k Tax and have 38k net salary and full use and 0 expense for running a car.

Question is if 12k less net salary and having a new car and all costs allowed from the company a better use of company income, rather than paying more income tax.

Hi, I'm in similar situation to yourself. I just started looking for insurance quotes and company car insurance doesn't seem to be offered by that many places - it seems to be either personal car insurance or commercial (van) insurance.
I rang AIG and Allianz and they don't offer it at all