I am thinking of buying a car for use in my business, but have heard this can be quite an expensive way of doing it with company car tax and things. What do you think is the best way of the getting the car?
Assuming you run your business through a limited company, the tax liability you will incur personally will be based on the Co2 emissions and the list price of the vehicle. In effect the lower the Co2 emission, the lower the personal tax charge.
Many car makers are trying to manufacture their vehicles to produce emissions of less than 110g/Km as this not only means a car benefit charge of only 15% of the list price, but allows the company to claim the whole cost of the car against your profits. So in some instances it can be cost effective way of acquiring a vehicle, but you should consider, amongst other things; that the charge covers the total cost of the car i.e. MOT, servicing &, car tax; how would you pay for the vehicle if you bought it privately and what kind of car do you really need.
I read in the recent press about HM Revenue & Customs cracking down on businesses that should be VAT registered but are not. Surely they cannot pick up every business that has not declared previously?
HM Revenue & Customs are finding increasingly more ingenious ways of identifying individuals or businesses who have either traded on the ‘Black Market’ or as you mention should have been VAT registered. Typically this comes in the form of extraction software that is able to search and gather data through the Internet (& other sources) to build up a picture and compare it to their current tax system. People who are trading through auction sites like eBay for example, are prime candidates for enquiry. In addition, since the Inland Revenue & VAT office have merged it has been easier for HMRC to identify those who have a turnover of over £73,000 (the VAT threshold). So ultimately, since HMRC have been given targets to raise tax receipts, you should see more enquiries with businesses that have not previously been registered officially with them.
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