Recently, The Smart Frog happened to jump across a rather neat and simple trick for family company businesses to fund their private car purchases for the family through the company in an extremely tax-efficient manner. So, he thought he'd share it with you, of course.
Try this for size.
Buy a car through the company for, say, £10,000 with CO2 emissions of, say, 100. Give said car to Son to use. Usual company car rules tax the car on the company director (i.e. Daddy). Taxable value (i.e. amount upon which tax is payable) is 10% of list price, therefore value is £1,000. Tax payable at, say, 40%, is £400 (or even lower if Daddy is a lower rate taxpayer). The car's running costs are claimable by the company in full in its accounts, and the purchase cost qualifies for 100% tax allowances because it is ozone-friendly.
All this, and the car doesn't have to be driven a single mile on company business. Little Johnny can happily drive around all day long wherever he wants. No need to keep a mileage log. No need even to work for the company. The company picks up the tab and gets full tax relief, Daddy pays the miserly company car tax bill, and Little Johnny can continue spending all day watching The Jeremy Kyle Show. Little Johnny is a very happy Little Johnny. Perfect.
Not sure the legislation was actually intended to produce this unlikely result. But it does. And so use it to your benefit, that's what we here at Smart Frog Towers recommend.
If The Smart Frog ever developed proper hands and feet then maybe he'd try out his own advice. Until then, it's jump, jump and away for him. See ya'...
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