Buying a company car

[samaygrg]

Hi All

I'm just wondering about 'purchasing a company car'. I would appreciate for any ideas' sharing if anyone has bought already or thinking about to, and any known-heard comments of its pros/cons implications on the extention.

Many thanks in advance.

[zimba]

Tier 1 rules state that Director's remuneration will not be counted towards investment in your business. Anything you receive from your company (e.g salary, bonus, etc) as well as enjoying the company property and benefits (e.g car, travel, fuel, ... etc) excursively for yourself is mostly considered a form of Director's remuneration as far as I know. This is covered by business law, so you better ask a chartered accountant views on this matter as this is outside the scope of immigration rules.
Bear in mind that Home Office can potentially challenge you if they see (in your accounts) that your investment is spent on something which might be count as Director's remuneration when you apply for your extension/ILR.

[jafersadeq]

Dear sam,
Please check the link:
https://www.gov.uk/expenses-if-youre-se ... yed/travel

Thanks

[ishfaqsangra]

I think Car can be on Company's name not on director and can be the part of investment. why not?

[ishfaqsangra]

I think Car can be on Company's name not on director and can be the part of investment. why not?

Someone please shed some light on

[Tier1newbie]

Generally it is absolutely fine for a business to purchase an asset in their name for the director to use. It gets tricky when we put the tier 1 ent visa in as the guildines highlighted in other posts suggest otherwise and the caseworks do most of the time have a harsh interpretation of these rules. If I am buying a car, then I would also keep paperwork ready to show that It is being used for business purposes and not only for comute to work daily just to be on a safer side.

[ishfaqsangra]

Let's say business want to get a car for an employee(other than director) how the things will work then.it is not necessarily t he director who will use the car.

[Tier1newbie]

As mentioned, it is absolutely fine the HMRC will not rAise any objections. Here we have to look from convincing the home office and keeping things as simple as possible.The op has mentioned that he is buying it for the director to use hence my post, If it is for business use and your business is such where you need a car and it is justified then its fine. When you have a person from the home office having zero knowledge about any accounts and what it should include looking and deciding your faith I would be very careful and extra cautious. My only point

Let's say business want to get a car for an employee(other than director) how the things will work then.it is not necessarily t he director who will use the car.

[jafersadeq]

Dear All,

The solution is:
If your company has got a profit (for example the net profit is 50,000GBP in 2015), you can develope your companys capital, this is called (capital allowance), you can buy a car for 30,000GBP (for example), you will not pay tax for its money because it is a capital allowance, you just pay a tax for 20,000GBP.
If your visa was 200k or 50k, you can not buy a car because the money which will be taken from 200k do not consider an investment.
Get a profit and buy a car, it is allowed and it is an investment.
Without profit, do not buy a car, if you buy, it is not an investment.
Kind regards.

[ishfaqsangra]

That is good addition and knowledge from Jafersadiq and You are absolutely right tier1 from your point but this is something which should be further explained so we all can get help.

[samaygrg]

Thanks all for your valuable insights and stirring up the issue to a nice level.

I had a thought to buy a company car as its asset and be used by the director and other staffs for business purposes. My accountant indeed was suggesting to go for it [to have the benefit of capital allowance in tax]. Regardless whether company running on loss or profit, I think if business needs it and can afford; can surely go for it and the purchase will be on company's name not for the sole use of director and his/her remuneration pack. The cost of it as investment is different aspect, it will go in company's balance sheet as an asset but its annual depreciation and operational costs will come in there.
I reckon one can easily justify it.

However, you all are very right; our scenario is little different than those of normal business people. Despite neither the accountant nor HMRC has got any problem regarding this, however, as you all suggested the caseworker might trick and mess us around it. So needed to be double careful and must keep things as simple and straightforward as possible. I will definitely think twice before I go for it.

Thank you.