Confused over providing a company car
We are a small start up company hiring a new salesman who needs a vehicle. We are considering the options, but likely the comapny will lease or hire a vehicle for him to use mostly for work, but some private use. I'm struggling to understand how the process works.
The employee pays for petrol some of which is for private use. As I understand if the company repays everything he would be hit for an addiitonal P11D charge for the provission of private fuel use. Since most of his miles will be business I expect this won't be tax efficient. So if we don't pay all of the petrol cost I understand we can repay at up to the advisory fuel rate of say 15p/mile on whatever is documented as business use. I understand this is free of any tax implication for the employee.
If the above is correct what happens to VAT? The employee has paid VAT on the fuel purchase so can we claim back VAT on the 15p we pay to him i.e. 2.5p?
I'm assumnig the Fuel Scale Charges I have come across only apply where the company pays all of the fuel costs and therefore where the employee is taking the P11D hit for fuel provision i.e. this is not relevant in this case.
Thanks for any clarification.
- CT600 19 1
- A number of Clearbooks VAT return issues! 146 2
- VAT on hotel payments received in advance 78 2
- signature required 414 18
- Director appointment not valid - any observations? 54 4
- Pratice Management Software 29 1
- Norwegian p45, which UK Tax return does it go into 178 10
- Left UK in 2006 but did not declare rental income since 2009 101 1
- VAT rate charged by surveyor 173 2
- Homing sandwiches 350 9
- Related Party Transactions 98 2
- How do I undo the work of a Macro in Excel 148 4
- UK resident receiving USA pension 52 1
- EU eservices VAT change imminent 454 9
- Sage payroll alternatives 750 13
- More AE! 754 17
- Web sites 238 3
- ethical- to continue to act or not? 596 13
- Dispensation 174 3
- Is laminated flooring an improvement on carpets? 506 14
- Auto enrolment excuses 1,229
- Feedback on accounts production software for IFRS 810
- Add T&Cs to Sales Order in Sage 510
- Digita Hosted Software 334
- Credit where credit's due....... 307
- Buying goods in US and selling them to company in US 234
- Flat rate VAT- other income calculation 186
- TheTax Donut 172
- Corporation Tax return - more than one trade 155
- Double taxation relief - same income, different individual 155