A company car is helpful as it can be used for both personal and business use. Remember that you may be responsible for paying the tax if you use the company car for personal use.
How to Calculate your Company Car Tax
For an accurate calculation of your company car tax, employees and employers can use a company car tax calculator. The tax calculator is provided by company car leasing companies like ALD Automotive. With this, you can monitor your car and fuel tax when you use the car for private trips.
What is the Basis of Tax on Company Cars?
The tax you pay for the company car depends on several factors which include:
- The actual price of the car and accessories (if any)
- The approved CO2 emission guides of the car
- The amount of fuel the car uses
- Whether or not you pay a lump sum for the car
- Whether there are any payments to the company for the private use of the car
If I only Use the Company Car for Business, do I still have to pay the Tax?
There is no need for employees to pay the tax if the car is only used for business purposes, such as meeting clients or going back and forth from your house to the company location. In this instance, the company is liable for the payment of company car taxes.
How Can I Prove That I Don’t Use the Company Car for Private Purposes?
The employer is responsible for keeping the records of the company car. On the other hand, the employee should also keep accurate mileage records to prove that the car is used for business purposes. The distance from the employee’s home to the work place is recorded and car maps are also provided. So, the employee should make sure that they don’t go beyond the limit. In addition, company cars can be equipped with a GPS, allowing the company to monitor the car’s whereabouts.
Are There Any Exemptions for Paying the Tax for Company Cars?
The answer to this is, yes! In the UK, the exemption includes the following:
- If ever the employee earns less than £8500 per year, they should be exempted from paying the tax
- If your company provides the employee with a van, it can be used for private purposes as long as the fuel does not exceed £500, annually
If you have any more questions regarding Company Car Taxes and other car leasing related queries, please do not hesitate to call us at ALD Automotive, on 087000 111 81.
d also keep accurate mileage records to prove that the car is used for business purposes. The distance from the employee’s home to the work place is recorded and car maps are also provided. So, the employee should make sure that they don’t go beyond the limit. In addition, company cars can