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Company car tax and mileage claim

Company car tax and mileage claimed from own co

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Client runs his own limited company through which he claims business mileage incurred in his own vehicle. He is also an employee of an unrelated company and is currently being offered a company car which will be available for private use.

If he accepts the company car he'll sell his personal car. Within the permitted private use he'll be driving business miles for his own limited company. Does the fact that he now doesn't own a vehicle preclude him from claiming milage from his own company?

At first I thought, no cost, no claim - but there is of course a cost because he's taxed on the private use of the company car (from his employment).

Thanks. And, anyone know of a good company car tax planning calculator?

Replies (13)

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By Sjsaccountant
20th Jun 2016 16:04

Does the employer of the unrelated company know that the indiv will be using the car for his limited company? I am sure insurance might need to be considered carefully - what if he had an accident whilst on his own company business and not the employed business.

But it seems too good to be true to claim from the limited company even though there will be personal BIK involved.

I think it is worth a call to HMRC as this is not run of the mill and I doubt their website would cover it!

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Replying to Sjsaccountant:
By chewmac
20th Jun 2016 17:14

Thanks sjs, other employer is aware he runs his own co. I'm not sure they'll be aware of his business mileage though but they're are giving him personal use. Other issue re insurance is worth looking into.

Any other comments on the ability to claim his own business mileage from own co will be appreciated.

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Replying to Sjsaccountant:
By Tim Vane
20th Jun 2016 23:20

Sjsaccountant wrote:

I think it is worth a call to HMRC as this is not run of the mill and I doubt their website would cover it!

First, why the hell would you rely on the HMRC website for anything, regardless of what it would cover? Do you seriously advise clients based on what is written down on gov.uk?

Second, and for pretty much the same reason, why the hell would you call and ask HMRC this question? If you're charging the client for professional advice, give them proper advice, not rubbish spat out by some numpty at HMRC - the client can get that sort of nonsense without paying you.

Finally, and this is to the OP, just claim it as you would any other personal mileage, stop overthinking it, and don't get your apples confused with your oranges. Oh, and stop expecting sensible answers in this new excuse of a forum now that all the helpful people have gone and the only people who are left are those that have to have things spelled out in 32 point font.

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By Marion Hayes
20th Jun 2016 17:37

I think the claim is fine. A mileage claim is available whichever/whosever vehicle is used from HMRC point of view.
The basic rule of thumb has always been that if you are taxed on a benefit then you are regarded as having supplied the asset but I think that is irrelevant to your question.

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By SKCOX
20th Jun 2016 22:30

Interesting stuff. Does the employer provide fuel for private use, or just the car itself? I'm not so sure about the BIK being a cost for the company, but fuel paid for personally clearly is.
Logically, I can't see how the 45p/mile rate would apply if all costs except fuel are met by another party. However I can't quote any legislation to support that view, and would be delighted to hear a contrary view from someone who knows better.

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Replying to SKCOX:
By chewmac
21st Jun 2016 09:23

Yes fuel for private use is provided. My client, the individual, will of course pay the costs of the BIK - as in his additional tax payable.

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By SKCOX
20th Jun 2016 22:38

Of course, in the good old days pre website change, PNL would have weighed in at this point and blown us all away.

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By Choctop
22nd Jun 2016 12:29

Wonderful reply from Tim Vane! "Oh, and stop expecting sensible answers in this new excuse of a forum now that all the helpful people have gone and the only people who are left are those that have to have things spelled out in 32 point font." Are you one of the people left, Tim?

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Replying to Choctop:
By Tim Vane
22nd Jun 2016 13:07

Yes I'm still here, so that proves I'm an idiot.

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By pauljohnston
22nd Jun 2016 13:13

Marion Hayes is correct. Consider the position if the guy used his mothers car. No different from your problem. Vehicle ownership is irrevelant.

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By davidgoodall
08th Aug 2016 09:26

The answer is no because the car is a "company vehicle". Do't jump to conclusions because it's a different company; just read s236(2)(b) ITEPA.

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Replying to davidgoodall:
By SteveHa
08th Aug 2016 10:25

I disagree. s.236(2)(a) and (b) both depend on the vehicle being made available by reason of "the" employment, and not by reason of "a" employment. "the" employment would be the employment that the vehicle is being used in in this context, and since it is not made available by reason of that employment, it fails the test as a company vehicle for AMA purposes.

In the circumstances, mileage is allowable.

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