If you have a limited company, you may be thinking of putting a car through the business accounts. You can do this; the car would be classed as being owned by the company, not yourself, and therefore the company would be lending the use of the car to you if you use it for private journeys.
If you do use the vehicle for your private use, this benefit would be required to be declared to HMRC at the end of the Tax Year in the form of a P11D, and any additional tax to be paid. The tax is calculated on the list price and CO2 emissions of the car involved.
In the company accounts, you can claim the direct expenses for the running of the vehicle; fuel, services, MOTs, insurance and roadside assistance are the common expenses a car incurs. You can claim the purchase of the vehicle as a capital allowance while calculating the corporation tax. When you come to sell the vehicle, the money received will go to the company. A total loss or gain on the sale will be calculated using the purchase price, sale price, and depreciation figure to date. This loss or gain is added to your business profits, and effects the corporation tax calculation.Tags:
company cars, expenses, motor expenses, allowable expenses