How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask TonyTax Your Own Question
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
Type Your Tax Question Here...
TonyTax is online now

- I am one of the directors of a limited company - I have

This answer was rated:

Hi - I am one of the directors of a limited company - I have a company car that I bought 4 years ago. the care has high emissions and as a result I am paying 34% of the list price and fuel allowance at 40% which is very expensive and t=not tax effective.
I am therefore considering taking the car off the books now before next tax year so that I can reduce my personal tax bill. The car is fully depreciated in the books and the webuyanycar value is about £4k.
Please advise exactly what forms should be completed, what I need to tell the revenue, how to determine the sale value of the vehicle to myself and presumably then I simply transfer the funds in to the business for the sale of the car and remove from the assets register.

You can use the PAYE reporting system (RTI) to inform HMRC of the change in the status of a company car. Information on that is here. The P11D will need to reflect the fact that the car benefit has ceased.

As an employee or director, you can call the tax office on the number here and tell the date the car benefit ceased so that they can make an adjustment to your tax code though it may be too late to do that for the current tax year if your March payroll has been run already.

As far as recording the sale of the car to you is concerned, keep a documented record of any independent valuations of the car. Have the company secretary write a letter to you offering to sell the car to you at its open market value, £4,000. Respond to that letter in writing accepting the offer. You could flip those letters if you wish so that you make the offer and the company accepts it. Transfer the purchase price to the company bank account. Have the accountants do the company book work to remove the asset from the register.

I hope this helps but let me know if you have any further questions.
TonyTax and other Tax Specialists are ready to help you