Benefit-in-kind tax.
Private use of a company car usually creates a taxable benefit for the employee. The calculation uses the car’s tax price, its emissions and its fuel type. Plug-in hybrids also depend on electric range and emissions data.
Company tax and capital allowances.
The company may claim capital allowances based on the ownership and the car’s emissions. A lease follows different rules from a purchase, and cars do not qualify for the Annual Investment Allowance.
VAT and lease costs.
VAT recovery depends on the purchase or lease, private use, and whether the business can meet the evidence requirements. A lease car often has a 50% restriction on the VAT element, but the exact treatment depends on the facts.
Fuel, mileage and records.
Keep mileage logs, fuel receipts, charging records, the vehicle details and the dates of availability. HMRC advisory fuel rates change during the year, so label any rate used with its effective date.
Official sources.
Check the current guidance before you rely on a rate, threshold, deadline or relief.
Choosing a company car or lease?
We can map the purchase, lease, VAT, payroll and benefit-in-kind points before you decide.
Discuss the vehicle costs