Motor Expenses

There is a lot of confusion with motor expenses, a Limited Company should never pay for your fuel, instead you should keep a mileage log, and the limited company can pay you per mile for business journeys.

The Limited company should never pay for your car insurance or repairs, if you buy a car outright or on finance, this should never be in the limited company’s name, if you do get the car in the Limited Company’s name the car will belong to the Limited Company. When you use a company car it is deemed to be an employee benefit and you will need to complete and file a P11d. The Limited Company also pays for the fuel, then you will also be deemed to be receiving a fuel benefit. The result could be a hefty personal tax bill.

It’s always best to seek guidance with regard to motor expenses and tax obligations, there are different rules with regard to the type of vehicle for example delivery vans, ambulances or pool cars are treated differently.

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