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Should I have a company car, van or motorcycle?

If you are thinking of getting a company car you should contact your accountant to discuss what the most beneficial option is for your situation.

However, generally speaking the corporation tax relief from running a company car will be undone by the personal tax you will need to pay on the Benefit in kind from having personal use of a company asset. For this reason it is usually most tax-efficient to purchase the car personally and claim the business mileage allowance of 45p a mile for the first 10,000 miles and 25p thereafter. See here for more information on claiming mileage.

If the vehicle is a motorcycle

If you have a motorbike, again we recommend that it is kept under personal ownership, as it is more tax efficient to do so. The mileage rate for a motorcycle is 24p per mile, and this does not change after 10,000 mile mark is passed.

If the vehicle is a van or bicycle

There is different advice available depending on if the vehicle is a van or bicycle, because of differences in tax treatment by HMRC.

If the vehicle is a van or a bicycle, bring the vehicle into company ownership as an asset. Record the van in Crunch under the expense type Fixed Assets> Motor Vehicles Cost, and if the vehicle is a bicycle record it as Fixed Assets> Equipment Cost.

Record the cost of fuel for the company van as Motor Expenses> Company Van Running Costs. Remember: do not record the cost of fuel for a van under the mileage expense type, unless the van is owned personally!

Record the cost of any repairs, maintenance or insurance for a company van as Motor Expenses> Company Van Running Costs. Again, only do this if the van is owned by the company.

Record the cost of any repairs, maintenance or insurance for a bicycle as Motor Expenses> Company Bicycle Running Costs.

 

 See the full list of expenses that can be claimed

Last Updated: 14 Sep 2015 10:06AM BST
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