Bad Credit - Lease/Purchase Car

[RRR]

Hello all,

My second post. Just wanted to start and say how great this forum is and that I have already connected with some great people to assist with my business requirements/activities.

Some quick background, awaiting comms from a deal I have brokered. Monies will be used to set up a company formation in Dubai. My question today is I would like to purchase/lease a new car (value circa £100,000) I have read in several threads that it is best to lease "to keep under the radar" which I fully understand and willing to do, the only thing is due to last year 2019 being a rollercoaster year (now on the up nicely ) my credit score/rating has slumped and it is at it's worst it has ever been. What options solutions do I have to guarantee the lease? can I use the Dubai company once it has been set up to lease a car in the UK? I have company (new venture) registered in the UK (reg 2020) I don't think I can use this company as it is brand new of course and there are no accounts currently.

Any advice would be highly appreciated.

 

[polonieth]

Why don't you just take the first option you presented which was "purchase"?

 

[RRR]

Why don't you just take the first option you presented which was "purchase"?

As mentioned above I would prefer to lease for various positive reasons (also highly recommended in other threads from experienced members of the OSCT community). The question is finding a way to guarantee the lease with a bad credit rating.

 

[Martin Everson]

Are you resident in the UK?

 

[RRR]

Are you resident in the UK?

Yes UK Citizen

 

[Martin Everson]

Yes UK Citizen

Purchase the car in that case.

If you don't want to purchase then please explain why you want to lease and don't talk BS reasons...be truthful about what you are trying to avoid etc and you get much better answers.

 

[RRR]

Purchase the car in that case.

If you don't want to purchase then please explain why you want to lease and don't talk BS reasons...be truthful about what you are trying to avoid etc and you get much better answers.

Well as I explained in my original post, I will be setting up company formation in UAE (eliminate UK corporation tax) - would it not raise any alarm bells with HMRC (tax-man) that I own a £100,000 car? where if it is leased there's no questions asked under the radar, have I got this wrong?

 

[polonieth]

Nobody financially sensible here is going to advise someone who doesn't have a pot to piss in how to lease a £100k car with bad credit

 

[RRR]

Nobody financially sensible here is going to advise someone who doesn't have a pot to piss in how to lease a £100k car with bad credit

Sorry who said anything about not "having a pot to piss in"? I'll take it that you judge people by their credit rating? which in this case your assumptions are wrong. Happy to pay for the car outright but I just remember reading in other threads to avoid it. If I am moving the majority of business activities to the UAE, wanted to know the best solution that is all.

 

[JustAnotherNomad]

So you officially live in the UK as a UK-domiciled tax resident and you’re trying to hide from HMRC that you are the UBO of the UAE company? What is your official source of income?

 

[RRR]

So you officially live in the UK as a UK-domiciled tax resident and you’re trying to hide from HMRC that you are the UBO of the UAE company? What is your official source of income?

Correct (the UAE company will be a separate business to my UK business activities).

Real estate sales official source of income in the UK.

 

[JustAnotherNomad]

I don’t know if it would be a good solution, but can’t you just lease the car in your own name? Or buy it from the proceeds of the real estate sales/taxed savings? Or be a guarantor in a leasing agreement signed by the new company? I don’t think the question is really related to the UAE at all. You have an “official” and an “undeclared” side of your income - so you’ll want to make things work within your “official” life.

I would think it must be a bad idea to bring untaxed funds into the UK, whether as cash or in the form of a car. If you pay yourself a loan or gift the money from the UAE, that’s certainly a reportable/taxable transaction. If you buy/lease the car on the UAE company and register it in the UK, you’re basically telling HMRC that the UAE company has an taxable branch in the UK. You can bet they’ll ask questions. Maybe the car dealer would even be required to report you.
Just live within your means. Remember they didn’t put Al Capone behind bars for violent crime, but for tax evasion. Because his lifestyle didn’t match his declared income.

 

[RRR]

I don’t know if it would be a good solution, but can’t you just lease the car in your own name? Or buy it from the proceeds of the real estate sales/taxed savings? Or be a guarantor in a leasing agreement signed by the new company? I don’t think the question is really related to the UAE at all. You have an “official” and an “undeclared” side of your income - so you’ll want to make things work within your “official” life.

I would think it must be a bad idea to bring untaxed funds into the UK, whether as cash or in the form of a car. If you pay yourself a loan or gift the money from the UAE, that’s certainly a reportable/taxable transaction. If you buy/lease the car on the UAE company and register it in the UK, you’re basically telling HMRC that the UAE company has an taxable branch in the UK. You can bet they’ll ask questions. Maybe the car dealer would even be required to report you.
Just live within your means. Remember they didn’t put Al Capone behind bars for violent crime, but for tax evasion. Because his lifestyle didn’t match his declared income.

This is exactly the response and advice I have been waiting for. JustAnotherNomad thank you very much for highlighting the above and making things much clearer

All the best!

 

[JustAnotherNomad]

And you’ll also certainly want to avoid driving around with UAE plates.

By the way, this is how the ultra rich do it:

Lewis Hamilton avoided taxes on £16.5m jet using Isle of Man scheme

Paradise Papers reveal F1 champion’s advisers set up offshore structure that experts say may be open to legal challenge

www.theguardian.com

But I believe they’ve started cracking down on this and you can bet that such a structure isn’t cheap to maintain.

 

[polonieth]

Sorry who said anything about not "having a pot to piss in"? I'll take it that you judge people by their credit rating? which in this case your assumptions are wrong. Happy to pay for the car outright but I just remember reading in other threads to avoid it. If I am moving the majority of business activities to the UAE, wanted to know the best solution that is all.

Credit rating is irrelevant. However, if someone is asking "how do I lease a £100k car through paid for via commissions that are yet to be paid, through a UAE company that is yet to be incorporated" then it's pretty difficult to take them seriously. Update us when you bought it in cash.

 

[Martin Everson]

This thread reminds of the dude that insisted he wanted to buy a 80k Tesla with no proof of income (see below). Best to simply earn the money and pay tax on it in UK. Like I said OP needs to be truthful that he simply wants to avoid paying tax in UK and drive around in a 100k car like the other clown in the thread below....lol . Sad news is he would be liable for UK tax on worldwide income no matter where he keeps the money .

Buying a car in Europe with a offshore bank account

Hi, i currently reside in europe and i'm trying to buy an 80k Eur. car. I work online and i use a offshore ltd and bank account to receive my money so i don't pay any taxes in my country. I wonder if it is too risky to spend this much on a car and maybe it would trigger the IRS?! If i had to...

www.offshorecorptalk.com

 

[RRR]

This thread reminds of the dude that insisted he wanted to buy a 80k Tesla with no proof of income (see below). Best to simply earn the money and pay tax on it in UK. Like I said OP needs to be truthful that he simply wants to avoid paying tax in UK and drive around in a 100k car like the other clown in the thread below....lol . Sad news is he would be liable for UK tax on worldwide income no matter where he keeps the money .

Buying a car in Europe with a offshore bank account

Hi, i currently reside in europe and i'm trying to buy an 80k Eur. car. I work online and i use a offshore ltd and bank account to receive my money so i don't pay any taxes in my country. I wonder if it is too risky to spend this much on a car and maybe it would trigger the IRS?! If i had to...

www.offshorecorptalk.com

Would have to agree to disagree with you on this one. Completely different situations. I now understand my options hence why I asked for helpful advice, isn't this what the forum is here for. I will be leasing the car myself with a higher deposit (due to the bad credit rating). Problem solved and will keep you all posted (Thank you @JustAnotherNomad & @CaptK)

No one is a clown, I live within my means we just need a family car now with the new addition to the family (two-door Coupe isn't ideal). I work hard to be in this fortunate situation.

@Admin need to clamp down on abuse like this just because one asked a simple question.

 

[NicolasMaduro]

quick risk & reward assesment and I would f*****g run away from this terrible idea. Just to dodge 19% corporate tax? Wow. You know the running cost of a UAE company. Hassle with banking etc. Also where is this commision coming from? UAE or from the UK?

You are also aware that this stunt might land you a huge fine/tax bill or even worse. And you have a family?

UK tax authorities will quickly see that your company is a tax resident in the UK.

 

[RRR]

quick risk & reward assesment and I would f*****g run away from this terrible idea. Just to dodge 19% corporate tax? Wow. You know the running cost of a UAE company. Hassle with banking etc. Also where is this commision coming from? UAE or from the UK?

You are also aware that this stunt might land you a huge fine/tax bill or even worse. And you have a family?

UK tax authorities will quickly see that your company is a tax resident in the UK.

Nicolas I think it has come as a shock to you because I haven't explained the full breakdown of the UAE company. Yes I am fully aware of the running/annual renewal costs (VERY HIGH). I have spoken to an international tax advisor, I won't go into too much detail as that is not needed and or irrelevant. The UAE company generates money from within the the UAE and Far East, nothing to do with the UK.

I have found the answer to leasing question . I am not concerned regarding the UAE company formation as I would not jump into anything without due-diligence and allot of research and questions.

Have a good day!

 

[NicolasMaduro]

Nicolas I think it has come as a shock to you because I haven't explained the full breakdown of the UAE company. Yes I am fully aware of the running/annual renewal costs (VERY HIGH). I have spoken to an international tax advisor, I won't go into too much detail as that is not needed and or irrelevant. The UAE company generates money from within the the UAE and Far East, nothing to do with the UK.

I have found the answer to leasing question . I am not concerned regarding the UAE company formation as I would not jump into anything without due-diligence and allot of research and questions.

Have a good day!

Good to know. Happy you did your due-diligence.