Buying EV when sole trader

carsfan2 · 13-06-2020 9:07am #1

Hi
Can any of you regular posters enlighten me as to if it is possibe for a self employed sole trader to buy an EV through the business as a company car and run it paying zero BIK bearing in mind I do minimal mileage for business and car would really be a commuting tool.
I know there is a 50k cap on the car.
I have asked my accountant who really is not giving me a straight answer as I think hasn't done it before so is wary.
Anybody here done this and are there any pitfalls?
I have looked at revenue website and can't see where I can't do this.

innrain · 14-06-2020 8:11am

Well the short answer is yes it can be done. The problem is: Is it worth?

If you need just a pointer, the start is here
https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-of-company-cars/exemptions.aspx

a more comprehensive explanation is here:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-04-02.pdf

Now, as it stands you have left just 18 months of the exemption. You need a plan what to do if this is not extended beyond the end of 2021. You didn't say if you're looking for new or SH. So in 18 months you'll be paying 30% BIK, every year, at a quite high OMV . (this value is before grants). Is this cheaper than drawing money from the business at 50 - 51% ( income tax + PRSI+USC). Possible but as the time goes the balance starts to skew towards personal buy.

However, there is another point that you need to discuss seriously with your tax professional and that is called Accelerated Capital Allowance. This is only if you buy (not lease) new
https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-09/09-02-04.pdf

Lumen · 14-06-2020 8:28am

There is no "company" if you're a sole trader, so "company car" and "BIK" doesn't make sense.

Yes, there are reliefs you can avail of.

I think you need to push the accountant harder or get a new one.

Buying EV when sole trader

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