What You Need To Know About Using A Company Car For Personal Use
If you drive a company in the UK, it's important to be aware of the tax implications of using the car for personal purposes. HMRC has strict rules around the personal use of company cars, and failure to comply with these rules could result in significant tax bills.
Can you use a company car for personal use?
Yes you can, but you will have to pay a tax if you do.
The HMRC rules about using a company car for personal use are binary - if you use the car for personal errands at all, you will be liable to pay taxes on it. Personal use of the car includes commuting.
More specifically you will have to pay a Benefit-in-Kind (BIK) tax. This charge is based on the value of the car, its CO2 emissions, and your personal tax rate. The higher the value of the car and the higher its CO2 emissions, the higher the BIK charge.
More about BIK for company cars
If you are still contemplating getting a company car for personal use, we have just the thing for you:
We have written a thorough guide on how company car tax works, where you can get to know the specifics of how the tax is calculated, and just how much CO2 rates matter. The tax you will have to pay can range from the thousands to nothing at all.
We hope you will find the information you need to make an informed decision about whether a company car is right for you or not.
If you end up getting one, remember that Driversnote’s automatic mileage tracking app makes it a breeze to track and report your mileage to your company, which is a requirement when using a company car for personal errands.
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