Dr. Andy Grimm explains how doctors with limited companies can buy electric vehicles tax-efficiently. A £40,000 EV generates roughly £10,000 in corporation tax savings through 100% capital allowances, while the annual Benefit-in-Kind tax charge is often just £200 to £700, making it a significant net win most doctors overlook.
So can you use a limited company to buy an electric car in a tax efficient way? Hello, I'm Dr. Andy Grimm, founder of Moneywise, doctor.com and author of the Money Wise Doctor who is an Amazon bestseller. So the resounding answer to that question is yes, you can use your limited company to buy an electric car if it's used for your company's business. Now if you're local, you need a car to travel, of course you can do that. And what you get, you can get 100 capital allowance. What? That means that if you bought a car for 40k and your company made a profit of let's say 100k, 40k can be deducted from the profit of your company as an allowable expense before you have to then pay tax on what is left. So if you deduct 40k, if your corporation tax is going to be 25%, that saves you 25% of 40k. That's a massive 10,000 and we've not even looked at the dividends you would have had to pay on the profit. Now many doctors have said, my accountants say, oh there's no point, you still have to pay benefit in kind. Now, benefit in kind is the government saying, well this was for your company, but use it for your benefit, so pay some more tax. But many haven't actually gone the f the the next step to ask accountant, how much benefit in car am I going to pay? If it turns out I'm just going to pay like 200, 300, 400 or even 700 in the tax here, but that saves me 10,000 in taxes. That might be something to consider. So I'm just curious, have you used a limited company to buy an electric car? Will you use a limited company to buy an electric car? Tell me in the comments.
