Trading in a personal car for a business car

3DataModem

My (small) company is buying a car for my use. I have been offered a good trade in on my personal car, however of course I cannot trade in a personal car for a business purchase (nor would I want to).

Is there some way I can sell my current car to my company and they can immediately trade it in as part of the new company car purchase? Effectively the company would be buying and selling a car at the stroke of a pen.

(FWIW the new car is an electric car so will be getting a full write-down in year one)

Calahonda52

I think you will attract the attention of the Revenue , especially the VAT aspect on second hand car sales by private individuals, I forget the rules that apply.
Anyway that is a welcome aside.

Form an accounting perspective, I see an issue here with valuations.
Clearly the trade in valuation is higher than a cash sale, so how will you deal with that in the company books.

eg, cash sale to company: 20,000
so the accounting entry is
debit motor vehicles, credit bank 20 k

Then then for the trade in, say the car is worth 25,000

So the new car is 40,000, funded in there by 25 for the car and 15 cash

How will you deal with the 5.
IMO, best dealt with outside the company

IRtax

This is very simple really.
The trade-in value you get for the second hand car is just treated as directors loan (capital introduced)

What you need to make sure is you pay bik on the car the company is buying that you are using personally. Needs to be fully electric ( not a hybrid) and less than 50k I think to be exempt from bik.

3DataModem wrote: »

My (small) company is buying a car for my use. I have been offered a good trade in on my personal car, however of course I cannot trade in a personal car for a business purchase (nor would I want to).

Is there some way I can sell my current car to my company and they can immediately trade it in as part of the new company car purchase? Effectively the company would be buying and selling a car at the stroke of a pen.

(FWIW the new car is an electric car so will be getting a full write-down in year one)

barneystinson

+1 to the second responder there.

Calahonda is, with all due respect, talking waffle.

3DataModem

Thanks guys. Makes sense.