Buying car through limited company

nino1

I am looking to buy a car through my limited company and I’m wondering what’s the best way to do it.

I am employed full time wilth a salary of €90000 and have a side business that has around €30000 that can be taken as salary. 

I have not taken any salary out of the company so far and i am not on the payroll.

I am looking at a second hand car for around €25000 that would have an omv of around €45000.

if I take €30000 as salary I’ll get around €15000 after tax. If I buy it through the company I’ve calculated the BIK would be €500+ a month so when i take in the capital allowance to write off and the BIK it doesnt make any sense to do it that way

Would anyone be able to advise me on the best way to pay for a car in my circumstances?

i have ran it by my accountant who said my BIK would be €172 per month which seems very low to me. I’m waiting for him to explain the figures but it’s obviously a very busy time of the year for him so hoping to get some advice here in the meantime.

Would it be better to lease a car?

Darc19

depends on your business mileage. Whey not look for electric? - no bik

Calahonda52

seems low

https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-cars/calculate-value-benefit.aspx

assuming no business mileage 30% of 45k at your top rate at 52% looks like 585 a month to me

nino1

Thanks for the replies guys.

Thats what i thought.

I'd nearly be as well to just take it out as salary and add to it and buy a car outright rather than going through the company.

unless there is another better method that i am missing?

Darc19

Only realistic format is to keep a record of travel

Keep a record of every business journey. day, date, time, purpose (must be business related), mileage and claim civil service rates

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

PickYourName

If you're doing little or no business mileage there really is no advantage to buying through your company. Even if it was marginally beneficial it's a lot of extra complication.

PickYourName

https://www.boards.ie/discussion/comment/118166459#Comment_118166459

Forgot to add: unless it's an EV, when then are/were significant benefits!

BnB

https://www.boards.ie/discussion/comment/118166459#Comment_118166459

Agree 100%. I did the maths numerous times over the years and it doesn't work. If you can live with a full commercial (not a crew-cab) it is a bit cheaper. But anything with passenger seats no matter what way I did it, you were always better off buying privately. If you buy span new, there is a chance that you would at best break even, but buying second hand it will always work out better going private.

As a poster said above, record every single journey that is any way business related on an excel file and pay yourself the civil service mileage rate tax free out of that instead.

Also, considering that you will be paying the top rate of tax on it when you take it out of the company is there anything you can do with it in the company to aid the growth of the company......Invest in marketing..... equipment...... anything like that (obviously depends a lot on your company)

top floor

At one stage company car drivers could avoid penalty points if the company (registered owner) did not supply the name of a driver if it got a notice.

Does that still happen? (Usually the points go to the owners licence if no name supplied, but the company does not have a drivers licence).

Darc19

https://www.boards.ie/discussion/comment/118180045#Comment_118180045

Long gone. Its now the driver and you are legally obliged to provide the drivers details. If you provide false details the fines are huge.

top floor

https://www.boards.ie/discussion/comment/118185739#Comment_118185739

Good to hear that. I thought it might be, but sometimes Irish loopholes are just not closed.