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Avoiding/Limiting Income Tax on Comapny Cars
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Posted By Ron Impey
I'm about to become more 'peripathetic' and the employer is insisting I receive a company car. I do not want or need a car for my own personal use.
Advice please on any ways of avoiding getting hammered for income tax on the unwanted vehicle.
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Posted By Graham Peters
You could try a pick up truck, which I think only attracts about £500 per annum tax, but this may have changed.
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Posted By Philip Roberts
Ron,
I was in the same position and I refused to take the car home. I used public transport to get to and from work and just used the company car for company business. This meant no personal tax liability.
Hope this is of some assistance
regards
Phil
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Posted By Jeff
I wonder how many will get the joke Ron?
Interesting that peripatetic means a pedestrian , someone who walks about.
A bit like the word ,gay,, which now has an additional and completely different meaning.
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Posted By Ron Impey
I've also been made home-based; does anyone have any comments on the pros and cons of this?
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Posted By Tyler
So, if you are home based, the suggestion of not taking the car home and only using it for business may not work (as the car has to be at home as that is your place of work).
I too am home based and am weighing up the pros and cons of a company car (at present I get essential car users allowance), so I would be very interested in any advice from this thread.
Is it a possibility to have a company car and only use it for business depite it being based from home?
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Posted By Martyn Hendrie
If you are going to be home based, have the car and not use it for personal use, you will have to keep very accurate records of all mileage the vehicle does to demonstrate it is all business mileage.
Otherwise the tax man will assume you are simply trying to avoid the tax liability.
How many mile a year to you expect to do?
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Posted By Adrian Watson
Dear Ron,
Yes it is possible to run a company car from home and avoid tax but your record keeping must prove that your car is only used for business.
Speak to your local tax office, they'll tell you what you need.
Regards Adrian Watson
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Posted By Ron Impey
Hi Martyn,
I plan to use the car as little as possible. I dislike driving greatly. If I should ever need a car for personal use, I would borrow my wife's; after all I paid for it!!
Up till now when I've needed to travel for work, I've gone by train, or when visiting our premises in Northern Ireland or Scotland, flown with Easyjet. Most of the travelling can happily be achieved in this manner, and when I do have a trip which cannot reasonably be done by public transport, I would then hire a car for the duration.
With the amount of concern regarding drivers falling asleep at the wheel, this causing more accidents that alcohol, my approach must be a far safer one.
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Posted By J Knight
What's wrong with paying tax on company cars? They are a very serious benefit after all, and the tax burden's not so bad. My car affects my tax code by about £2000, and I've spoken to a few people who think this means I pay an extra 2 grand a year in tax; of course , it doesn't, it actually means I pay about £500, which is absolute peanuts when set against the enourmous advantage of having a new car, free servicing, no road tax, free recovery etc etc. Get real, a tenner a week for a new car is a serious burden? I think not,
John
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Posted By Stuart Nagle
Ask for a van rather than a car. at present these are tax exempt in respect of company vehicle use, but will be subject to tax in the future.
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Posted By Dave Wilson
Ron,
Bit tongue in cheek here mate, why dont you ask your employer to increase your salary to take care of the extra taxburden or do they offer an extra amount if you dont take the car option but provide a car for business use youself?
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Posted By Anthony Elsmore
Ron,
May I suggest that you ask your employer to reimburse your travel per mile using your wifes car, as this results in no change in your tax status.
You are then complying with your employer i.e. you are able to travel by car when required, while avoiding the unwanted change in tax code.
Inland Revenue advice is 40p per mile for the first 10,000 miles and 25p for any additional milage. If you go to the Inland Revenue webpage there is plenty of advice available. If your wifes car is already paid for I would imagine it would actually be quite lucrative to travel in this way. Don't forget to ensure you have business class insurance though.
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Posted By Ron Young
Get a car with very low CO emmissions, this reduces the tax burden considerably. There are several websites giving emmission comparisons between cars. Get the car and enjoy trouble free motoring
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Posted By Ashley Williams
Hi,
I agree with the other company car user. I had a company car with fuel card and the tax implications hardly mattered at the end of the day.
The way i looked at it is the tax was about what i would have been paying for a new car in loan charges, insurance, road tax and wear and tear on the vehicle.
Sure we dont like paying the tx man more than we have to but at the end of the day work out how much your own car costs you and its usually about the same, but with the benefit of knowing if its stolen or damaged you wont have to pay.
Ash
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Posted By Stephen Boardman
Hi Ron, I managed to get rid of my company car last year I am glad to say.... I was in a negative tax bracket. The tax goes of the CC of the engine, therefore the smaller the car engine the smaller the tax bill... thats asuming you have a choice of car. Another issue is that of personal mileage, if you are homebased and you only use the car for business then I suggest you opt out of personal mileage and pay for your own private fuel, it is only worth while having the private mileage fuel tax if you excede 5000 private miles per year. And finally keep a log of all your business miles including start mileage, finish mileage nature of journey.
Hope this helps
Steve B
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Posted By Bob Youel
R
My friend [a tax inspector & yes my friend] waited outside somebodies home for months to try to catch a person who did not need nor want a car other than for business use.
The persons wife moved the car a few feet whilst it was on their drive, so as to get hers out. The car did not even go onto the public road.
This one action caused the tax office to insist that the car was used for personal use - the case eventually went to court and the tax office won! - be warned!
There are many things a company can do to provide a car for work where it is not taxable to the individual - pool cars are best but you usually find that your fellow employees [car users] have this funny way of wanting their own car so you end up with the same one all the time and again you fall into the trap of having private use of it.
There is no reason why a company cannot take on the liability but most just won't.
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Posted By Nick Higginson
Ron
I work from home and have a company car and I would never go back to be honest.
I think the tax is based on emissions rather than engine size - I have a 2.0 litre Diesel Turbo and it only costs about £500 a year in tax. Considering the fact that I don't pay for insurance, tax, servicing, tyres, cleaning etc. etc. this is nothing.
Kind regards
Nick
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