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Company Car for self employed!

Company Car for self employed!

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A consultant who is registered as self employed has the use of a vehicle all the time provided by a company he carries out work for.

What are the tax implications for both the company and the consultant.?
david

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By Richiejjj
02nd May 2006 15:24

Has the treatment for this changed?
This is an old topic - but has the treatment changed?

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Teignmouth
By Paul Scholes
28th Feb 2002 00:42

Get both sides to agree the treatment
David
Agree with general comments over risk to self employed status of the work, nb the company takes the risk in this.

Not sure though on the declarable sum if they maintain s/e status, in that the scale charges are for employed & employers not s/e.

Case I had there was a good reason the car was used, ie it was spare, company had no use for it and was more reliable than the one run (when working) by the s/e consultant.

So the deal was, here's the contract price for the work and then they negotiated a reduction for the depreciation, running costs etc covered by the company, ie a commercial arrangement. Problem was nobody told the payroll dept who sent in a P11D for the car & s/e consultant, without telling her!

So, get the 2 sides to agree the commercial reasons & price for the arrangement, in writing, ie it can't be left as a perk.

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By AnonymousUser
22nd Feb 2002 11:26

COMPANY CAR FOR SELF EMPLOYED
David

If a company provides a company car for someone who is registered self-employed, it would be my opinion that the Revenue would view assignments carried out for that company as employment.

One of the tests of self employment/employment is that to be truly self employed no benefits normally associated with employment are provided.

In this case the Revenue would likely insist that he is treated as an employee by the company and the consultant would pay tax/ni as an employee on that income and the car benefits. In addition the company would have to pay employer`s NI on payments to him and on the car benefits.

This of course would be backdated to the relevant point with interest and penalties!

Good luck!

GRAHAM ASSOCIATES (INTERNATIONAL) LTD
[email protected]

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By AnonymousUser
22nd Feb 2002 11:33

First impressions!

I think your question is about a company providing a car for the sole use by a self employed individual. Assuming this is so then my initial observation is as follows:

1) The self employed status of the individual may be questioned because it is not normal for companies to provide company cars to self employed persons;
2) If for various reasons the self employed status is maintained then the cash equivalent of the benefit would be the normal car scale rates treated as additional fees paid;
3) From point 2 above, there may be VAT implications on the self employed (additional output) and on company (additional input tax)
4) If fuel is also provided then similar consequences as point 2 and point 3 above;
5) Self employed may not be able to claim any motor expenses because everything is paid by the company;

Hope this helps.

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By Lorraine Meeks
17th Nov 2011 09:59

Hi,

 

I would also like to know the current situation for this topic?

 

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