17/07/2026
Should I buy a car through my Ltd company?
It’s one of the questions we’re asked most often… and the answer is it depends.
Many people assume buying a company car automatically saves tax, but that’s not always the case.
Here’s a simple example using a £40,000 car and a higher-rate taxpayer:
⚡ Electric Vehicle
* Very low Benefit in Kind (BIK)
* Usually the most tax-efficient option if you’re buying through a limited company
* The company may also be able to claim generous tax relief on the purchase
⛽ Petrol or Diesel Vehicle
* Much higher BIK rates
* Often results in a significant personal tax bill each year
* In many cases, it’s more tax-efficient to own the car personally instead
The biggest mistake we see? People buying a petrol or diesel company car because they assume “it’s a business expense”, only to be surprised by the personal tax they owe.
Before you buy your next vehicle, make sure you’ve looked at:
✔️ Corporation tax relief
✔️ Benefit in Kind
✔️ Personal tax
✔️ Running costs
✔️ How you’ll actually use the vehicle
A company car can be a fantastic tax-saving opportunity… but only if it’s the right car and the right structure.
Thinking about buying a vehicle? Send us a message first!
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