Interesting EV Purchase / Sale Proposal.

Gumbyman2000

Howdy. Before I launch into a possibly mad manoeuvre I thought I’d run it by a few wiser heads here. 

Background: I am a sole trader

Proposal: 

Buy EV (car, not van), through the business. 

Claim the accelerated capital allowance as a year 1 expense of €24k

No EV BIK in 2022 

BIK kicks in for 2023 BUT at that point I would ‘sell’ the car back to myself at market value. Not sure how this works or if possible as Sole Trader?

Is this all a bit nuts or does it make sense? Will take it to accountant but time is very much money there, be great to sound it out first. 

Thanks! 

adrianw

As a sole trader you and your business are viewed as one so you wouldn’t be able to sell the car to yourself. However, I’d be fairly confident in budget 2023 the government will announce the extension (in some form) of the BIK exemption on EV cars given the take up is still relatively slow. So I wouldn’t let that put you off.

nompere

Sole traders aren't liable to bik. It only applies to employees.

Gumbyman2000

https://www.boards.ie/discussion/comment/118224113#Comment_118224113

Hey - thanks and thanks @adrianw - great info!

That is great news about BIK but is there anywhere I can see this rule?

The Revenue website (https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-cars/index.aspx) says

"The information in this section applies to you whether you are a company, a partnership or a sole trader."

but maybe that applies to a sole trader that is employing somebody else and providing them with a car (as opposed to just me, being the self employed person).

Thanks again!

Stratvs

https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/what-is-benefit-in-kind/index.aspx

As others have mentioned, BiK only applies to employees. It applies to employees of sole traders, partnerships and companies. A sole trader is not their own employee so BiK does not arise. The actual costs of the vehicle (subject to any relevant restrictions on value etc.) and it’s running are what’s allowed for a sole trader, subject to any personal usage being disallowed.