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Motor expenses for directors

Motor expenses for directors

Please could somebody help me with a query.

If a director claims costs for car tax, service, mot etc are these deductable for corp tax? This is for a personal car used for business, not a company car.

If they have also claimed the 40p mileage allowance (which my understanding is allows for the above costs) do the additional car maintenance costs need to be shown as a benefit in kind on their P11d?

Many thanks

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09th Mar 2011 16:19

This is a big 'No no'!

It's not really a P11d (benefit in kind) issue.

Either the value of the expenses should be treated as net pay and so grossed up and the appropriate PAYE/NI paid to HMRC or, and this is more usual, to charge the costs to the director's current (loan) account. This balance sheet account will record that the director owes the money back to the company or the debt can be satisfied some other way in future eg. by way of dividend.

The bottom line is that the director shouldn't be claiming these costs.

-- Kind regards Andy

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09th Mar 2011 17:17

Motor expenses for directors

Thanks very much for your help.

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