So company cars should you or shouldn’t you? Well, this is another series on company cars because I know it is something that has been sleeping for a while. But it’s so, electric cars and low emission because it’s got into the mix again. And if you all looking at an expensive car with high missions and naughty emissions car, maybe 135 grams or more maybe that’s reducing to 115 grams or more now.
Then should you buy or should you purchase it or should you lease it? Now, if you’re buying an expensive car, let’s say it’s 80,000 pounds. And it’s got high emissions. You know, for example, it’s a, you know, it’s a big Range Rover or something and it’s got some high emissions. Then it’s going to cost you something in the range of 80,000 pounds.
You’re allowance is going to be very low? So first thing is, you’re going to spend this 80,000 pounds if you buy it for cash. You’re going to have no cash left and you can have 80,000 less cash in your bank account. The second thing is if you had purchase it, then effectively you’ve bought the asset, you’re not going to be able to depreciate it that very much. So you’ll have 80,000 pounds worth of liability, which will hurt your balance sheet, but your tax bill will not come down by very much.
And of course, then the third thing, which is what I think you may want to be looking at, is leasing it. Because when you lease it, you can just write off league the payments directly to your profit and loss. There’s no big hit on your balance sheet, and as a result, you’re going to end up with a bit of tax position than if you hypotenuses or bought it outright.
Hopefully that makes some sense. And if you are looking at company cars and you want some help, then you know, speak to your account. There’s no better place to go for advice than your accountants because they know all about this stuff. And if they don’t, so maybe come and have a chat with me.
All the best. Take care. Goodbye. Happy driving.
