Electric Car

Oct 21, 2011
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Hi folks,

Hopefully not a complicated question as I am not an accountant.

I am a director of a small limited company on the flat rate VAT scheme at 14%. I am considering a 3 year lease on a fully electric car at c£220 pm inc VAT through the business and there will be some private use by myself. Expect to do c25 business miles per working day.

Will I be net better off with a personal lease and claiming 45p/mile for business miles and paying servicing costs out of my own pocket, OR, leasing through the business as the company car tax rate is zero for electric cars until at least 2015 and the lease, insurance and servicing cost reducing corporation tax and ultimately personal tax through paying slightly less dividend.

I usually end up in the 40% tax bracket on my personal tax return.

Thanks for your advice.


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