Lucky

Until recently I had a car, given to me by my own company, as a benefit. It Italy it means that the company can deduct all costs related to my car, including gasoline and everything, but I must add a percentage of the value of the car to my personal income and to pay taxes on it. So, very convenient for the company but not for me, personally.

So, exploiting to the full our laws, I changed my scheme. Now, I own my 535d personally (actually it's a long term rental) and I invoice my company every time I make a business trip with a "mileage cost" based on official government cost-per-mile tables. With expensive cars like BMW 5er, you more than recover the cost of the lease and fuel and still have some coins in your pocket;. For the company it's a full deductable cost and you don't pay anymore taxes on your fringe benefit.

Is this allowed in USA or UK?

E60Sim

Some people in Denmark are doing this to.. You just got to have the cash to buy the car, or lease it..

But alot of people dosen't think about it that much, and does still think it's cheaper to drive a "company car" with free gas... But then you have to pay taxes every month...

If you really drive ALOT privat, it's cheaper to drive the company car, and pay the taxes, but if you dosen't drive that much privat, and do have many business trips - you can even earn money be driving your BMW!!

Lucky

You're right; and if you're the boss (like I am) who can tell you that you are doing too many "business trips" to your golf club, tennis club and local BMW Motorbike club?

E60Sim

You just got to trust your employees... And if you dosen't check their calender - if it was a business meeting at the golfclub or a day of...

my530i

You lose one way or the other. If you pay the car for yourself, you need to use your own money which goverment already took away at least 30% out of your paycheck. So, if you make your car payment of $500/month, you have to make around $700. You already lost $200, then you have to pay tax for your car, let's say another 10%. Therefore, goverment wins mostly. However, if you have business, it's another story.

Here are the scheme:
Working for a corporation as an employee:
You earn => Pay Tax => Get your net paycheck => Spend => Pay Sale Tax
Example: Earn $100K => Income Tax 30% ($30K) => Net Paycheck $70K => Buy E60 ($50K) => Sale Tax 10% ($5K) => Net saving $15K
$100K - $30K - $50K - $5K = $15K

Have a business:
You earn => Spend => Pay Sales Tax => Your gross income => Income Tax => Your saving
Earn $100K => Buy E60 ($50K) => Sale Tax 10% ($5K) => Income Tax 30% ($15K) => Your net saving ($30K)
$100K - $50K - $5K - $15K = $30K

Remember that if your gross income is low, your tax bracket follows.

Evenflow545

Better solution in USA: Buy a $65,000.00 BMW. Keep in garage. Buy $17,000.00, slightly used Cadillac Deville for business. Gets 28 mpg, highway. Drive the living shit out of it, on business, at 41 cents per mile IRS reimbursement. The mileage reimbursement soon pays for the Cadillac. Drive the BMW to dinner and for fun. Throw the Cadillac away and buy another one. Repeat as often as necessary.

juan2mini

Effective Sept 1, 2005 the IRS rate for reimbursement went up to .485 cents a mile. I reallllllllllllllly need to get out more.

unit

Ya, but the only problem is that you are driving a Cacillac Deville around most of the time.



sorry is the fool who trades his soul for a Cadillac
thinks he'll get the girl, he'll only get the mechanic

Evenflow545

I'd drive a Cadillac for business purposes all day long.

shiny

Or buy an $82000 BMW