Selling My Taycan - Accounts Query

[tombillented]

Hi all,

Question for the Taycan / EV owners who have purchased / sold cars through their limited companies. I purchased my Taycan outright through my limited company on November 1st.

Due to unexpected work changes, I'm going to be spending the majority of this year in the U.S so I'm reluctantly going to put my vehicle up for sale as I don't want it sat depreciating into early 2024 before I'm back (I might as well order another another one for when I'm back) and sell this for hopefully around what I paid for it.

2 Questions:

1 - Could I technically sell myself / fiancee the vehicle for a nominal amount from the company (say £100) and then sell it privately exempt from tax as it's considered a perishable good? As the company owns the vehicle outright is there anything dictating how much I could sell it to myself / fiancee for?

2 - Am I still able to write off the vehicle as a taxable expense through the business even if it's "sold' within the same business tax year? I assume the answer here is NO but if i was to keep it until a new tax year would that be a get around?

and yes I've asked my accountant and should have a response at some point but thought some people here may have done this before and have some answers!

Cheers!

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[TaycanHero]

Hi all,

Question for the Taycan / EV owners who have purchased / sold cars through their limited companies. I purchased my Taycan outright through my limited company on November 1st.

Due to unexpected work changes, I'm going to be spending the majority of this year in the U.S so I'm reluctantly going to put my vehicle up for sale as I don't want it sat depreciating into early 2024 before I'm back (I might as well order another another one for when I'm back) and sell this for hopefully around what I paid for it.

2 Questions:

1 - Could I technically sell myself / fiancee the vehicle for a nominal amount from the company (say £100) and then sell it privately exempt from tax as it's considered a perishable good? As the company owns the vehicle outright is there anything dictating how much I could sell it to myself / fiancee for?

2 - Am I still able to write off the vehicle as a taxable expense through the business even if it's "sold' within the same business tax year? I assume the answer here is NO but if i was to keep it until a new tax year would that be a get around?

and yes I've asked my accountant and should have a response at some point but thought some people here may have done this before and have some answers!

Cheers!

My understanding is:

1. The business owns the car as an asset. You cannot sell the car to yourself for below a fair market price, and if HMRC were to find out, there would be potential fines for corp tax, BIK and NI avoidance. You would then have to pay the money back to your business. If it takes a few years for the gestapo at HMRC to find this out, you can start exponentially increasing those sums for every tax year.

2. Yes because you never wrote off any corp tax in the first place, since your financial year includes both the purchase and the sale. If you sell the car for less than what you paid for it, then you write off the difference in corp tax, the remainder is corp taxed. If you sell it at a profit, then that sum (purchase price + profit) is corp taxed.


I am currently in a huge merry-go-round with my accountant where for the past month I have had the Taycan deposit wrongly placed into my DLR; now he's insisting I paid myself more than what I did from three years ago, with an eye watering tax bill (I know he's wrong).

I'm beginning to wonder if it's worth buying anything through a business where it just adds to hassle and confusion, and with accountants who seem to rely on a Google search to find out how to account half the items on any tax return...

 

[tombillented]

Thanks for this - informative! For point 2 - if the car was sold in the following tax year so that the entire amount was deducted for this coming tax year, does that change anything? Or would you essentially have to pay corp tax on the car when it's sold in the future?

It's interesting seeing if there are any loopholes at all! But they've normally got it figured out to stop this kind of thing happening don't they.

 

[TaycanHero]

Thanks for this - informative! For point 2 - if the car was sold in the following tax year so that the entire amount was deducted for this coming tax year, does that change anything? Or would you essentially have to pay corp tax on the car when it's sold in the future?

It's interesting seeing if there are any loopholes at all! But they've normally got it figured out to stop this kind of thing happening don't they.

You should look at it as essentially deferring corp tax because you will eventually sell it.

This FY let's say you turnover £500k, car cost £125k and there were no other expenses.

Corp tax = 19% on profit of £375k = £71,250

Next FY you sell the car for £115k and you turnover £500k again.

Corp tax = 25% on profit of £615k = £153,750

If we work out the corp tax "saving" through depreciation of your car, then it's actually nothing. You ended up paying circa £5k more selling next FY because corp tax is increasing 6ppt.

For that reason, look at it as deferring rather than saving. Also, if you are going to sell, get rid of it this tax year before the 25% corp tax hits. You are otherwise paying out ££££ for some freeloader or criminal in Parliament to enjoy your hard earned.

I'm looking at MVL'ing my company before the tax year is out. I still have my Taycan deposit down. I might be able to convert the deposit into a dividend payment, then purchase the car as a personal expense. That could be beneficial.

I like you will be spending most of the 12 months from April in a warmer and more chilled place. The Taycan - when it arrives - will be living in storage within a taxi ride of Heathrow for those few months I return.

 

[TaycanHero]

When I first heard of the IRS, I thought it was a terrorist group ?

I later found out it technically is a terrorist group.

At least in the UK we make them sound all nice and pompous.

 

[TaycanHero]

I am leaving for a 0% tax jurisdiction end of March.

It's going to be a bit surreal having spent two decades paying tax on everything I earn.

But equally, very liberating.

The Taycan? We will see. I really want the car, so it looks like most of its time will be spent in a lock up as I'll be waving goodbye to the UK.

 

[Murph7355]

1) No. You would get spanked very hard for trying that.

2) I doubt there'll be much point with the likely purchase and sales prices.

btw TH....how much deposit did you put down for your accounting to be saying you over-paid yourself and now have a big tax bill?

On the MVL piece, if the deposit was paid by the company you may (should) simply be able to treat that as an "asset" in the MVL rather than having to "convert" it. So you'll get entrepreneur's relief on it.

 

[TaycanHero]

1) No. You would get spanked very hard for trying that.

2) I doubt there'll be much point with the likely purchase and sales prices.

btw TH....how much deposit did you put down for your accounting to be saying you over-paid yourself and now have a big tax bill?

On the MVL piece, if the deposit was paid by the company you may (should) simply be able to treat that as an "asset" in the MVL rather than having to "convert" it. So you'll get entrepreneur's relief on it.

Deposit was £5k, which my last accountant put into the DLR, perhaps because he didn't know what it was or left it there and forgot about it.

New accountant saw it and then sent an eye-water payment on account for this January. But not just because of that - he found more misallocated items so I'm in a month-long merry-go-round trying to show it is all b*llocks and I owe the tax man zero.

That would be nice to get ER when MVL'ing on the deposit, however, I don't think the car will exist even by March. Either way, I see that situation as favourable as I will just ask the dealer to swap details to me personally, then I'll buy the car using MVL funds.


How is your wait going? I saw a recent post you were thinking about throwing in the towel?

Oh and Happy New Year! Wishing you a good one despite the strange times we continue to live through.

 

[Murph7355]

Happy New Year to you too!

Sounds like you're n the middle of much bigger decisions than just the car!! If I didn't have a young-ish family I'd be doing the same thing...best of luck with it.

On the MVL/deposit, it won't matter that the car doesn't exist. It's company funds and the liquidator can just treat it in lieu of cash at bank. Either way, it's not world changing amounts of money being saved on that aspect.

Ref my order.... I pinged the dealer last week to cancel (my contact was out of office until this week. Will call them later in the week to follow up).

I don't "blame" the dealer for lack of news/certainty on the order. To me this is all down to the mothership. The stories on here of options potentially being removed didn't fill me with joy either. And as you know. I keep an eye on the approved used site....cars on there aren't moving much.

On the GTS STs, the pink one is down to £119k. (Not really surprising given the colour, but I'm pretty sure it started at £130k or so not that long ago). There's a Volcano one that has dropped £5k in a couple of weeks (now £129k) and there are a few others on at numbers that I suspect will fall in a week or two. We're now basically at or below list for cars that are moving. A couple of months ago, 10k-20k over list was being asked.

Beyond the GTS, there are also some very good spec Turbos at prices that are falling too...I never got a test drive in a GTS (yet) on local roads, but a CT might actually be a better bet (I tried a 4S CT round here and it was great).

So my plan is to ditch the order, and then take my time. I'll get a test in a GTS on local roads when that becomes viable, and then see what happens with used prices over the next few months. As things stand, I am doubtful I'd have been getting into a new car until much later this year, or possibly next. And I'm not short on cars to use. So will see what the market does.

It would not surprise me if well-spec'd cars aren't under £100k within the next 12mths. I've never been a "must have a new car" type person (the GTS was an impulse order, and partly based on availability of used cars not looking likely at sensible numbers. I'm now at the point where the impulse has well and truly waned and the overall process is now making it all a bit "meh"), and the prospect of dropping 20k-30k for the privilege is less enticing now than it ever has been

 

[Rob********]

The Taycan? We will see. I really want the car, so it looks like most of its time will be spent in a lock up as I'll be waving goodbye to the UK.

You are welcome to leave it on my drive near Esher. I would merely need the keys and I promise to use the two bucket method when cleaning it! ...

 

[TaycanHero]

Happy New Year to you too!

Sounds like you're n the middle of much bigger decisions than just the car!! If I didn't have a young-ish family I'd be doing the same thing...best of luck with it.

On the MVL/deposit, it won't matter that the car doesn't exist. It's company funds and the liquidator can just treat it in lieu of cash at bank. Either way, it's not world changing amounts of money being saved on that aspect.

Ref my order.... I pinged the dealer last week to cancel (my contact was out of office until this week. Will call them later in the week to follow up).

I don't "blame" the dealer for lack of news/certainty on the order. To me this is all down to the mothership. The stories on here of options potentially being removed didn't fill me with joy either. And as you know. I keep an eye on the approved used site....cars on there aren't moving much.

On the GTS STs, the pink one is down to £119k. (Not really surprising given the colour, but I'm pretty sure it started at £130k or so not that long ago). There's a Volcano one that has dropped £5k in a couple of weeks (now £129k) and there are a few others on at numbers that I suspect will fall in a week or two. We're now basically at or below list for cars that are moving. A couple of months ago, 10k-20k over list was being asked.

Beyond the GTS, there are also some very good spec Turbos at prices that are falling too...I never got a test drive in a GTS (yet) on local roads, but a CT might actually be a better bet (I tried a 4S CT round here and it was great).

So my plan is to ditch the order, and then take my time. I'll get a test in a GTS on local roads when that becomes viable, and then see what happens with used prices over the next few months. As things stand, I am doubtful I'd have been getting into a new car until much later this year, or possibly next. And I'm not short on cars to use. So will see what the market does.

It would not surprise me if well-spec'd cars aren't under £100k within the next 12mths. I've never been a "must have a new car" type person (the GTS was an impulse order, and partly based on availability of used cars not looking likely at sensible numbers. I'm now at the point where the impulse has well and truly waned and the overall process is now making it all a bit "meh"), and the prospect of dropping 20k-30k for the privilege is less enticing now than it ever has been

Yes there is a lot going on both in work and life, but should all be sorted within the next few months. It is that I have no real commitments that I am intent on leaving the UK! Much higher standard of living can be found elsewhere and with more fair taxation.

Very useful to know about MVL'ing, and I will keep it in mind when I go through the process in the next few months.

Shame you cancelled, but totally understandable. Tbh I remain on the fence. It does seem a bit of a faff, especially if I am only in the UK a few months of the year. I could drive the Taycan into Europe where I will live for 3-6 months, but then I would want something smaller for the unknown city/urban driving.

I too expect a drastic drop in used prices next 12 months, so that too is something playing on my mind. As you mention, some of the excitement has now died down with the extended wait, and if it means 10%+ depreciation in the first year, I think I would be happier with an F-Type V6 convertible that is already beyond the heavy depreciation curve.

 

[TaycanHero]

You are welcome to leave it on my drive near Esher. I would merely need the keys and I promise to use the two bucket method when cleaning it! ...

Actually, if there is a spare drive and if I do go ahead with it, we can talk!

Not sure about leaving the keys though ?

I suppose you might need them in case of "emergency"!...

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