Comany car for business use only

[djmotorsport]

My wee business has just secured a contract that will involve me commuting ~80 miles a day for the next 6 months and possibly up to 18 months. I don't want to put miles on my own car, so I'm thinking about getting a company car (6 years old A3 diesel). Journeys would be from business address to client's address only. However, my business address is the same as my home address. How would I prove to HMRC that the car was only for business purposes, and therefore not subject to company car taxation? Also, given that I would pay for all fuel, would I be OK claiming the usual (40p/10k, 25p) for business miles?

[Eric Mc]

Keep accurate records of the mileage undertaken by the car. Keep accurate records of the numbers of time you used the car to visit business clients. If necessary, this should enable you to prove that the mileage undertaken coincided with business appointments and trips only.

Make sure that the "non-company" car is genuinely used for personal trips and NEVER (even once) use the company car for non- business trips.

[JakeR]

you mean as a pool car Eric? Am I right in saying that a Pool car should be kept at the place of business too, in the normal course (fine if youn work from home though)...?

[Eric Mc]

Essentially yes.

The pool car MUST be retained at the place of work and must NOT even be capable of being used for non-business journeys.

[JakeR]

Is that more Revenue babble? Not even capable? what do they think differentiates a car capable of non business and business journeys?

Edited by JakeR on Saturday 23 February 08:27

[Gordon Brown]

Eric Mc said:

Essentially yes.

The pool car MUST be retained at the place of work and must NOT even be capable of being used for non-business journeys.

Eric I understood that a pool car could never be kept at a home address even if the business were at that address? That may be someone's practical interpretation of HMRC's atitude. I know that with gymnasium equipment for staff they specifically say 'not at a domestic' address.

[Don]

In my experience you can only lose with the Revenue and cars. Trying to treat one, genuinely, as a "pool car" used for business trips only is pretty much impossible. Whilst what Eric says is 100% right I can tell you from experience...we considered this, got professional advice and the level of botheration you had to go to to show that the vehicle was solely for business use and was not a benefit to anyone was ridiculous.

As a small company the Revenue distrusts you utterly and they are very unlikely to accept that a car does business miles only: even to the extent you reverse the bugger on and off your drive at the weekend to get your personal car out - that's personal miles, sir, and we claim our five pounds (or rather more).

My advice? Don't get an A3 diseasel. Go find what car you can lease/buy as cheaply as possible that fits the current government bks for enviro-friendliness. I'm thinking a Pug 107, stroen C1, Twotty Ayego, Toyoty Pious or similar. It will cost bugger all to run and won't kill you on the car tax. You can put 18 months of miles on it and the depreciation still won't amount to much.

You could also look into what is the best deal - buying and running the car out of Company money and paying car tax....OR...buying and running the car out of your money and claiming 80 miles a day mileage. At 40p a mile that's £160 a week or £640 a month. That'd pay the loan and fuel most likely...

[Eric Mc]

Gordon Brown said:

Eric Mc said:

Essentially yes.

The pool car MUST be retained at the place of work and must NOT even be capable of being used for non-business journeys.

Eric I understood that a pool car could never be kept at a home address even if the business were at that address? That may be someone's practical interpretation of HMRC's atitude. I know that with gymnasium equipment for staff they specifically say 'not at a domestic' address.

I don't think that it is set down in Revenue regulations that the "home" can't be designated as the "business" base for pool car purposes. I may be wrong.
If that is indeed the case, then no business only cars could ever be based at a business which is based in the same building where the proprietor happens to live - which seems rather draconian to me. Not everyone who runs a business from their home address is an IT worker using a bedromm as an office. There are all sorts of businesses where legitimate full blown business premises and owner's accomodation are in the same place.

[boycieboy]

Have you thought about leasing a vehicle for the period of the contract?

Not sure about the tax implications but may turn out cheaper in the long run??

Try www.lex.co.uk they seem to have a lot of info on their site and are one of the 'bigger players' in the market place.

[Eric Mc]

Tax implications for leae vehicles are much the same when it comes to Benefit in Kind matters.

Leased vehicles are treated VERY differently from owned (or even HP) vehicles when it comes to the business making its Capital Allowance claims.

[djmotorsport]

Thanks for the insightful replies! Based on your advice, my plan will be to keep the car on the street (so no moving it at the weekend to get my S3 out) and there will be a mileage log kept in the car at all times which will be completed after each journey. Don,I see your point w.r.t the tax/enviro friendly approach but I'm getting the car really cheaply and I don't buy this plant food crap

The power of PH - Thanks guys......

[944gav]

David

Does your business have other employees or is it just yourself? To qualify as a pool car, the car must be made available to, and actually used by more than one employee.

If you are the only employee, the only way of escaping the benefit charge is if private use is specifically prohibited. That may prove difficult to argue if it came to an enquiry if you are the only Director and the car is kept at your house.

My advice would be to buy the car yourself and claim 40p/25p per mile. As the car will not be brand new and you will not face big depreciation, this might work out better financially anyway as long as nothing major goes wrong with the car!

[51mes]

If you are visiting a location more than 40% of the time the revenue can declare that to be your primary or secondary place of work...

This measn you can't claim mileage...

I'm home based and have had my mileage reviewed by the taxman and was explicitly asked to prove that.

Get a small car cheap to run as possible - say a small fiat diesel (grande punto woudl be a good choice - or my 100Hp if you have an thirst for octane)...

Simon.