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| *Ostroff, Fair and Company>>>United Kingdom Taxes |
What happens when you get a company car? |
What happens when you get a company car? You have to pay Tax on the 'benefit in kind' whether you only use it for business or not. The benefit in kind is the value of the car plus accessories and each year this is multiplied by a percentage depending on the emissions and whether the car is petrol or diesel. The value of the 'benefit in kind' is then deducted off your tax code so you pay more tax. Basically you pay less for lower emissions cars you'll drive it very carefully so that the boss will be happy and get you a higher job when he sees that you really take care. you stop paying for transport but your tax goes up. check out the inland revenue site for prices but be in for a long read coz its not that straight forward. If you ONLY drive it for business purposes, then should not have any tax issues, but you will have to be able to prove to your employer that all use was business. If you use the car for personal reasons too, then a portion of the autos value will be added to your W-2. The amount added will be based on the mileage used for personal reasons to the total mileage used. I advise you not to try to cheat on this because you not only have the IRS but your employer as well to deal with. In most cases, that would be a terminable situation. The income addition usually is not that much to risk audits or termination. CPA |
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