2nd hand EV as a company car?

[dan_b]

Are there any accountants/tax experts around the round table who can help with my question?

My company so far has 3x EVs for staff as company cars - all bought brand new.
Company gets tax write off against full purchase value in year 1, it's a VATable purchase, and the staffer pays 2% BiK on the value of the car.

The question is, does the same apply if we bought a 2nd hand EV for a member of staff - do the same tax advantages still hold?

We're wanting to offer EVs to more staff, so thought this could be a lower cost route in for us?

[Joeboy]

I've not heard of secondhand cars qualifying for tax benefits. Its a good idea though.

Co incidentally, I've given some thought recently to getting No1 son into a secondhand EV. His daily round-trip to work is about 20 miles. Could be a possible for a leaf and then onto IO if qualified... we'll see.

[jonc_uk]

Lower cost for you, but the BIK for the employee is based on the new price of the car plus accessories, all at new list price.

I have always seen this as a lever the motor trade applied to business (via government legislation) to ensure company cars were bought new.

There is also the Octopus leasing scheme with salary sacrifice to consider. Not company cars, but for employees who would not justify a company car.

[dan_b]

Ok so the BiK would be 2% based on the original purchase price - that makes sense.

Any ideas about VAT or corporation tax deductions?


We applied to Octopus EV but they turned us down as not a big enough company to supply.

[Countrypaul]

Ok so the BiK would be 2% based on the original purchase price - that makes sense.

Any ideas about VAT or corporation tax deductions?


We applied to Octopus EV but they turned us down as not a big enough company to supply.

When we bought a second hand car for the company the VAT was treated as normal. That is if the car had always been with VAT registered companies then you would get a VAT receipt as normal and could reclaim the VAT. If the car had been owned by a non VAT registered owner then there would be no VAT receipt and could not claim it back, so if a private owner they paid the VAT and it could not be reclaimed. Doubt whether that has changed.

[jonc_uk]

Company accountant says:

Vat is not reclaimable on any cars to be provided as company cars. It's also almost never charged on sale of 2nd hand cars, so there's no loss of vat.

The capital allowance side is 18% per year reducing balance, so 18% of price paid in year one, then 18% of 82% year two.

In the end, you get the full relief eventually.