Business Car Travel - Options

[neversay]

I have to be on the road more with clients for the next 6-9 months (and possibly longer) so need to sort a car for when public transport isn't an option*. Typically 3 days a week on average, 200-300 miles each time, all travel costs reclaimed from client. We have a private family car for school runs etc and don't particularly want a second car hanging around when it's unused.

1. Daily hire. My normal Europcar hire works out £40 a day on our contract but causes a lot of hassle of collection/drop-offs (and paperwork) each time due to the proximity of the rental office.

2. Short-term lease. These look to be around >£250 a month for a small run-around. Do these have a BIK implication?

3. Company car. I don't particularly want the overheads and BIK. If it was our main car, it would leave my wife without a family car for school runs while I'm away, so we then need to keep a second car. (I'm interested in the new tax incentives starting for electric cars though)

4. Private car. I could buy a cheap old car to use as a second vehicle for contracts but that means insurance, MOT, road tax, repairs, but can claim mileage rates at 45ppm.

The short-term lease seems the best option, but I'm wondering what others would do and if I'm missing anything?

N.

[Slarti]

The short-term lease seems the best option, but I'm wondering what others would do and if I'm missing anything?

Put it all on a spreadsheet to compare the costs, remembering that if you buy a car, you will be able to sell it at the end.

If you use a short term lease car, I don't see BIK being a problem, as long as you only use it for work.

Salrti

[didds]

the other option from #4 is buy a cheap 2nd hand runaround that your wife uses for the household errands etc and you use the family car for the client visits - your current vehicle may be more reliable etc although it does put mileage on that vehicle. It also requires agreement of your wife !

wrt selling that 2njd hand car on afterwards you'll be unlikely to lose much in its value in such a shortish time span, but will potentially lose a mnonth's VED when you get rid of it and probably some hit on cashing in the insurance... and speaking of insurance do yopu have an NCB in your own name for it? (or your wife if 2nd car ends up in her name etc)... otherwsie the premium may not be a sbig a bargain as you'd hope.

wrt a 2nd car on the driveway whichever option you take seems to stuff that preference ie of not having a 2nd car on the driveway uneccesarily. ie weekends, work from hoime days (if they exist etc).

didds

[neversay]

Thanks @Slarti. I agree on the spreadsheet but it's the soft factors that have got me going around in circles. The short-term lease looks like a good option though although @Didds you rightly point out it looks like I'm stuck with a second car. A short-term lease would only be for business use but how do I 'prove' no personal use to avoid a BIK?

[Slarti]

Thanks @Slarti. I agree on the spreadsheet but it's the soft factors that have got me going around in circles. The short-term lease looks like a good option though although @Didds you rightly point out it looks like I'm stuck with a second car. A short-term lease would only be for business use but how do I 'prove' no personal use to avoid a BIK?

Record the mileage of each journey. Cameraphones are good for that. Put the details into a spreadsheet with dates, destinations, miles and £ to be claimed. If all journeys are business, that proves it.

Slarti

[neversay]

Thanks @Slarti. I agree on the spreadsheet but it's the soft factors that have got me going around in circles. The short-term lease looks like a good option though although @Didds you rightly point out it looks like I'm stuck with a second car. A short-term lease would only be for business use but how do I 'prove' no personal use to avoid a BIK?

Record the mileage of each journey. Cameraphones are good for that. Put the details into a spreadsheet with dates, destinations, miles and £ to be claimed. If all journeys are business, that proves it.

Slarti

@Slarti - so obvious but I completely missed that option. Thanks!

(Edit: I expect that helps with invoicing clients as well as I can apportion travel costs to contracts)

[Slarti]

Thanks @Slarti. I agree on the spreadsheet but it's the soft factors that have got me going around in circles. The short-term lease looks like a good option though although @Didds you rightly point out it looks like I'm stuck with a second car. A short-term lease would only be for business use but how do I 'prove' no personal use to avoid a BIK?

Record the mileage of each journey. Cameraphones are good for that. Put the details into a spreadsheet with dates, destinations, miles and £ to be claimed. If all journeys are business, that proves it.

Slarti

@Slarti - so obvious but I completely missed that option. Thanks!

(Edit: I expect that helps with invoicing clients as well as I can apportion travel costs to contracts)

I have a column for job numbers and a small grid at the end of each month that does a sumif so I have a running total for each client, even if their contract is such that I don't charge them mileage as a distinct figure.

Slarti

[PaulBullet]

Also look at long term car rental

I think Avis or one of them even allows you to drop car at the airport and take another one at the destination airport

Paul

[neversay]

I have a column for job numbers and a small grid at the end of each month that does a sumif so I have a running total for each client, even if their contract is such that I don't charge them mileage as a distinct figure.
Slarti

Perfect. That would make life easier.

Do you happen to know how you insure a short-term lease? Is it using specialist business insurance or privately? (I will get Googling this as well)

Also look at long term car rental

I think Avis or one of them even allows you to drop car at the airport and take another one at the destination airport

Paul

Thanks @PaulBullet. It's interesting just looking at the figures and I'm starting to tie myself in knots again. If you went for a long-term lease, even recording and allocating all the mileage to contracts as @Slarti suggests, surely HMRC would see it as a BIK?

It seems ripe for abuse if you have a company car permanently and record zero personal use. Travel 1 mile for personal use then you get hit for BIK all of a sudden. That has me confused as I want to avoid BIK costs given that having the car wouldn't be of personal benefit.

(Apologies - it may appear that I'm overthinking this but I'm weighing the benefit of having an accessible car for business trips, against the hassle of having an extra car that we don't need around at any other time).

[Cookie]

If client pays, just use train and taxis

I used to run a second car, but it just sat on drive as tried keeping mileage down to keep resale price and used trains

Alternatively, hire car, reimbursed mileage 45p/mile more than cover rental normally

[redsturgeon]

From next year, get an electric vehicle, take the full 100% capital allowance in year one and pay 0% BIK.

John

[Cookie]

From next year, get an electric vehicle, take the full 100% capital allowance in year one and pay 0% BIK.

John

Provided you pay about twice the price of an equivalent petrol car, only drive relatively short distances, pay to replace the batteries during its lifetime and work out the electricity charge vs petrol!

I'm just a cynic!

[redsturgeon]

From next year, get an electric vehicle, take the full 100% capital allowance in year one and pay 0% BIK.

John

Provided you pay about twice the price of an equivalent petrol car, only drive relatively short distances, pay to replace the batteries during its lifetime and work out the electricity charge vs petrol!

I'm just a cynic!

Compare Golf E with the equivalent ICE Golf and I don't think it is twice the price.
I've just checked and nearest comparator for performance and spec is a Golf GT @ £25k vs £30k for the E-Golf (with government grant}
Then assume BIK 12% of say £30k x 40% tax rate saving about £2.5k pa
Then £0 VED vs £170pa
Then fuel cost about 25% saving
Batteries have been easily lasting 100k miles, I've never run a car that long in my life.
Also most other parts will last longer, no gearbox, clutch, turbo, brake wear much better etc etc.
Don't be so cynical...

John