Cars and taxing issues

We have listed below a number of issues that you will need to consider if directors or employees use a car for business purposes.

Essentially, if the car is owned by the business any private use of the vehicle will trigger a tax charge for the driver (car user) and a possible NIC bill for the employer.

Use of a car may be exempt from these possible charges in the following circumstances:

  • If the car is owned privately by the director or employee and any costs met by the employer relate to business journeys.
  • If the car is owned by the employer but no private use of the vehicle is allowed. Employers are required to notify employees that this is the case and check that these instructions are complied with.
  • If a car is adapted for an employee that is disabled. This use is only exempt if the private use is restricted to journeys between home and work and travel to work-related training events.
  • There is no fuel related tax charge if any personal fuel is paid for by the employee or if the employer pays, but the private element is reimbursed by the employee.
  • The use of pool cars is generally ignored. This assumes that there is no private use and that cars are kept at the business premises.

The way in which any taxable benefits are reportable to HMRC is complex. Partly, this depends on how the benefit is formalised. For example, is it a salary-sacrifice arrangement? Generally, any chargeable, private use of a company car is returned to HMRC each year on a form P11D. This will then determine the amount of tax payable by employees on the deemed benefit provided and also contribute to the amount of any NIC payable by the employer.

Share:

Share on facebook
Share on twitter
Share on pinterest
Share on linkedin
Accounting in Sheffield and Doncaster

Recently Added News

Related News

FIx your bike voucher scheme

A Fix your Bike Voucher Scheme has been launched by the Department for Transport as an incentive to encourage the numbers of people using their

What to do in Doncaster

At the heart of Doncaster Town Centre is the historic market, Regency buildings and a rich railway taking people far and wide across the United Kingdom. However,

New law clarifies redundancy rights

New legislation applies from 31 July 2020 to ensure that furloughed employees receive statutory redundancy pay based on their normal wages, rather than a reduced

Quick Links

Online References...
  • DocSafe
  • Xero
  • Iris Openbooks
  • Intuit Quickbooks
  • FreeAgent
  • MoorePayHr
  • Income Tax Rates
  • Income Tax Reliefs
  • Pension Premiums
  • Car and Fuel Benefits
  • Mileage Allowance Payments
  • Corporation Tax
  • Capital Allowances
  • Company car tax
  • VAT
  • Payslip
  • Profit analyser
  • Loan
  • Inheritance
  • Gross profit margin
  • Savings
  • Form Title One
  • Form Title Two
  • Form Title Three
  • Form Title Four
  • Form Title Five
  • Form Title Six
  • 57 ways to grow your business
  • Free Business Advice
  • Tips for Business
  • Company Search Service
  • Search for a UK business
  • Find by Company Name
  • Search by UK director
  • Comprehensive Business Database
  • Credit Checker Service
  • Comprehensive Business Database
  • Full Reports on over 1.5 million UK Limited Companies
  • Information on over 1.4 million Non-Limited Businesses
  • Businesses for sale and wanted
  • Sources throughout the UK
  • Search now
  • Business Link Yorkshire
  • Federation of Small Businesses
  • HM Revenue & Customs
  • Companies House
  • Moneyfacts
  • Data Protection
  • Law Society
Client Testimonials
Meet the Team

Sheffield Office:
2 President Buildings,
Savile Street East,
Sheffield ,
South Yorkshire,
S4 7UQ

Telephone:
0114 272 0306
Fax:
0114 272 6158
email:
sheffield@roystonparkin.co.uk

Opening Hours:

Mon-Wed: 8.30am – 5pm
Thursday: 8.30am – 7pm
Friday: 8.30am – 2pm

Doncaster Office:
3 Railway Court,
Ten Pound Walk,
Doncaster,
South Yorkshire,
DN4 5FB

Telephone:
01302 320444 / 304440
Fax:
01302 342604
email:
doncaster@roystonparkin.co.uk

Opening Hours:

Mon-Thurs: 9am – 5pm
Friday: 9am – 4.30pm