Motor Expenses - Ltd Company - Query?

[Bridget1968]

Would just like some advice on this please.

Limited company, one director who usually claims 40p per mile for motor expenses.
In this new financial year wishes to claim all motor expenses through the business and not use the 40p per mile allowance.
The car is owned by the director and NOT the comany.
Director has asked her accountant about this who has said it is now ok to put all motor expenses through the business.
If this is so then I will need to issue fuel scale charge as some of the mileage will be private.

My question really is can the director change how they claim motor expenses and also can the director claim motor expenses through the company as the car is owned by the director and not the company and therefore it is not a company car.

Thanks for any input everyone. :|

 

[MrPAYE]

Mileage rates only can be claimed tax free I'm afraid. If the car is owned by the director and the company pays any running costs this would be taxable and subject to NI.

The only way round this is if the company buys the car from the director (at a proper market value) in which case there would be a taxable benefit arising on the director as a company car and a fuel scale charge by what you say, not to mention all the vat and corporate tax side effects for the company to think about.

Whether that is the right thing to do is anyones guess.

 

[dp0848]

Mr PAYE is right. It is very rare that it is more tax efficient to have a company car than to claim the 40p per mile.

David.