Good morning! I have a question in relation to income tax on company cars: can payments made for private use ever be used against the lease payments of the car to reduce the taxable benefit? I'm guessing not, based on HMRC rules. So in addition, is there a difference between a contract hire and a lease in terms of reducing the taxable benefit (i.e. are payments made for private use allowable if the company car is hired, rather than leased)? Thanks!
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Not the right approach
The taxable benefit is calculated from the list price of the car, the fuel type and the CO2 emissions. It makes no difference how the company has sourced and financed the car. Payments for private use are deducted from the calculated benefit.