Company car for business use only?
Discussion
Anyone have experience of how much hassle it is to do a company car on business use only? I own the company, have private car and my contract of employment is from my home (registered business address). Need to be at four sites about equally (Swindon, Coventry, Leeds, Huddersfield) with a good chance of adding Durham, Plymouth and Cardiff so miles will be huge. I genuinely won't be using the car for anything but business (will be sick of the sight of it tbh after that sort of miles), but don't want to add huge miles to my xc90.
What to do? Company car with fuel card for business use only?
Buy a car personally which is a lot more efficient and claim back at 45p / mile?
Take the train with a food up electric bike?
Thanks in advance
What to do? Company car with fuel card for business use only?
Buy a car personally which is a lot more efficient and claim back at 45p / mile?
Take the train with a food up electric bike?
Thanks in advance
If you have a company car for business only, you need to find an insurer who will cover you for business use excluding social domestic and pleasure. This can be tricky because many insurers insist on giving you sd&p if you need it or not.
But once you have a business use cert only, that's what you need to show HMRC to avoid benefit in kind tax penalty.
But once you have a business use cert only, that's what you need to show HMRC to avoid benefit in kind tax penalty.
Cars for business-only use
Definitions or restrictions
Business use only covers the following two types of journey:
journeys forming part of an employee's employment duties (such as journeys between appointments by a service engineer)
journeys related to an employee's attendance at a temporary workplace
Everything else counts as private use.
What to report, what to pay
Provided you prohibit private use of the car and no private use actually occurs, you have:
no reporting requirements
no tax or NICs to pay
Pool cars
Definitions or restrictions
Pool cars must meet the following conditions:
used by more than one employee
not ordinarily used by one employee to the exclusion of others
not normally kept at or near employees’ homes
used only for business journeys – private use is only permitted if it is merely incidental to a business journey (for example, commuting home with the car to allow an early start to a business journey the next morning)
What to report, what to pay
Provided all these conditions are met, you have:
no reporting requirements
no tax or NICs to pay
Definitions or restrictions
Business use only covers the following two types of journey:
journeys forming part of an employee's employment duties (such as journeys between appointments by a service engineer)
journeys related to an employee's attendance at a temporary workplace
Everything else counts as private use.
What to report, what to pay
Provided you prohibit private use of the car and no private use actually occurs, you have:
no reporting requirements
no tax or NICs to pay
Pool cars
Definitions or restrictions
Pool cars must meet the following conditions:
used by more than one employee
not ordinarily used by one employee to the exclusion of others
not normally kept at or near employees’ homes
used only for business journeys – private use is only permitted if it is merely incidental to a business journey (for example, commuting home with the car to allow an early start to a business journey the next morning)
What to report, what to pay
Provided all these conditions are met, you have:
no reporting requirements
no tax or NICs to pay
I am based at home and have offices in London, Hampshire, Manchester, Barnsley, Doncaster, Nottingham,Glasgow and Bradford.
TBH apart from the Hampshire office I use the train, its much simpler in tax terms, you can work on the train, and for London and Manchester it is much faster than the car. The other journeys all take about 30 mins longer than by car, but its less stressful generally.
First class advance tickets are the best option.
TBH apart from the Hampshire office I use the train, its much simpler in tax terms, you can work on the train, and for London and Manchester it is much faster than the car. The other journeys all take about 30 mins longer than by car, but its less stressful generally.
First class advance tickets are the best option.
sinizter said:
Is it really more tax efficient to get a company car if you own the company ?
No, but it changes the calculation - I.e. It is a bit like Peter robbing Paul, loading expense into the company ultimately costs me through lower dividend whereas an employee wouldn't have that direct connection. Also, it gives more options about where the expenditure happens (I.e. through the company vs post personal tax)blueg33 said:
TBH apart from the Hampshire office I use the train, its much simpler in tax terms, you can work on the train, and for London and Manchester it is much faster than the car. The other journeys all take about 30 mins longer than by car, but its less stressful generally.
Agreed - the nature of the job means that no offices are anywhere near the train station though 
. Taxi costs (or electric fold-up bike) are pretty much the only options I can come up with. Cardiff and Plymouth in particular need 15 mile journeys from station
Vytalis said:
sinizter said:
Is it really more tax efficient to get a company car if you own the company ?
No, but it changes the calculation - I.e. It is a bit like Peter robbing Paul, loading expense into the company ultimately costs me through lower dividend whereas an employee wouldn't have that direct connection. Also, it gives more options about where the expenditure happens (I.e. through the company vs post personal tax)I suppose company expenses are basically from completely untaxed funds, so will eventually work out better as long as no BIK taxes arise.
Vytalis said:
blueg33 said:
TBH apart from the Hampshire office I use the train, its much simpler in tax terms, you can work on the train, and for London and Manchester it is much faster than the car. The other journeys all take about 30 mins longer than by car, but its less stressful generally.
Agreed - the nature of the job means that no offices are anywhere near the train station though . Taxi costs (or electric fold-up bike) are pretty much the only options I can come up with. Cardiff and Plymouth in particular need 15 mile journeys from station
to pick me up.ruff'n'smov said:
Use the train...no initial outlay and as others have said....much less stressful...I took the same option and have not looked back.
I forgot to add when I said use the train, that the other benefit is that I now enjoy driving again I sometimes use the Tuscan for business trips though, when I know I have enough times to avoid the motorways and drive on fun roads. Cotswolds to Hampshire is a favourite
Edited by blueg33 on Sunday 27th November 13:44
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