Business Travel Expenses....

[Haslam]

I have just bought a car on HP - can I claim the travel expenses/HP payments from my own company as it will be mainly be used for business purposes.

Any advice would be greatly appreciated.

Thanks

H.

[Eric Mc]

When you say "company", are you talking about a "limited company"?

Have you spoken to your accountant about this?

[Haslam]

Eric Mc said:

When you say "company", are you talking about a "limited company"?

Have you spoken to your accountant about this?

Yes, a Ltd Company. My accountant is away on holiday for 2 weeks, hence I asked the question in here.

Thanks

[Eric Mc]

I presume you have bought the car personally and it is in your name - not the comapny's?

[Haslam]

Eric Mc said:

I presume you have bought the car personally and it is in your name - not the comapny's?

Yes, I bought the car personally and it is in my name - not on the company's name.

[Eric Mc]

The one thing you should NEVER do is use the company to pay for direct motoring costs of this car - that includes all running costs, RFL, insurance etc AND it includes any loan, HP or other finance costs associated with the vehicle.
The car is a personal asset and, if the company starts making payments in respect of it, it will be deemed to be paying personal costs on your behalf - and you will be taxed on this expenditure under the Benefit in Kind rules.

The way you need to recoup the running costs of this car from the company is for you to reclaim expenses from the company using the Mileage Allowance rates - which are 40p for the first 10,000 business miles and 25p for all business miles above 10,000.

This ius perfectly allowable and you will not be personally taxed in any way onn the money you withdraw from the company to cover these claims.

[phoenix14]

My boss (Ltd company) has his own car and just claims any mileage he does for work purposes at a certain pence per mile.

Don't think you can claim HP payments as an expense as surely then it'd be a company car and entail all the company car tax rules that go with it.

[Eric Mc]

If the car is owned by the company, then the company can and WILL reclaim the finance costs as legitimate business costs. There is no problem with this and the tax man would actually expect to see the finmance costs and running costs being reclaimed through the business.

However, the individual who drives that car WILL be taxed under the Benefit in Kind rules.

The general assumption is that the tax advantages gained by the company in making its legitimate business claims in respect of the car will be outweighed by the extra taxes (and NI) araisng on the Benefit in Kind calculations.

This is not always the case however and there occasions when the equation will not work out too bad for the business - depending on the car being used and its CO2 rating.

[Haslam]

Thanks Eric for the advice - guess I have to follow that procedures.

Thanks once again.