Better Business Coaching

There was a time not so many years ago when a running a company car was considered to be one of the best ‘payments in kind’ that was open to business owners and their employees.

However over the last decade the tax authorities have gradually introduced measures of taxation to reduce the benefits of having a company car and many consider themselves to be better off by running their own vehicle and claiming an agreed mileage allowance from their company.

If for instance you are likely to travel a regular 20,000 miles a year for business the tax office allows you to claim a set amount for each business mile covered.

This option requires the driver to keep records of their mileage, separated into business and personal mileage, of which only business miles can be claimed.

It is worth mentioning that travelling to and from a place of work is not considered to be business mileage.

If you make the choice to run your own vehicle, you are personally responsible for all running costs, including road tax, repairs, maintenance and insurance.

If you are using your own vehicle for business use be sure to confirm with your insurance company that you are covered for using the car to perform your business. This is an area that is often overlooked, but could end with serious consequences.

It is worth taking a privilege car insurance review to check out how personal and business motor insurance’s differ, in both cover and cost, but don’t be tempted to save a few pounds on the wrong cover as it will almost certainly come back to haunt you.

If you are involved in an accident and you happen to be carrying goods or samples relating to your business, a personal motor insurance policy will refuse to pay out, unless you can afford a very good lawyer, and may also result in a fraud charge and extra costs having to be found.

If you are a company owner or an employee who has been given the choice of a company car, take a look at the HM Revenues & Customs tax calculator to see how this benefit in kind works for you.