Hello can someone help me. I am a director of a company, I have bought a car under the company. I use my car to drive to and back from my employed work. Can the company claim back petrol expenses or can I claim back petrol expenses on my self assessment.
Regards
Adam
As a company director, the tax consequences are numerous:-
Corporation Tax
The company purchases the car (as it seems to have done in your scenario). As a result the company can claim all the running costs relating to that vehicle as an allowable expense for Corporation Tax. You will also be allowed to claim a capital allowance for the car.
VAT
With regards to the VAT on fuel, you have four options:-
1. Claim all the VAT back on the fuel because it was used 100% for business;
2. Claim all the VAT back and apply a fuel scale charge with respect to private motoring;
3. Use detailed mileage records to separate private from business motoring. You would then only claim the Input VAT on the proportion of business motoring to total motoring;
4. You do not claim the Input VAT at all. This would occur because in the second scenario, the scale charge is greater than any Input VAT that can be claimed.
Personal Tax
If the company is providing you with a car and fuel, then you may be subject to scale charges on provision of both for whch you would have to pay Income Tax (and the company Class 1A National Insurance).
There are ways of alleviating these possible liabilities and would suggest that you read this
blog.
