Leasing a car through the Company?
Watch out for a surprise tax charge – even if you are reimbursing the Company or even paying the costs direct. Like share schemes, if you get the opportunity to get a benefit by reason of your employment there is potential for a tax liability on that benefit.
A tribunal found that a director who arranged for his car to be leased in the name of the Company though he paid all the costs, had the car 'made available' 'by reason of the employment' and there was 'private use'. That meant the car benefit legislation applies with two main impacts.
- The director should include this on the self-assessment annual tax return – failure to do potential creates a penalty.
- Unless the payments are formally a condition of the car being made available, the payments cannot be a deduction against the potential tax charge.
For more information on any of the content covered in the article, please email Fiona.Bell@rm2.co.uk, or call a member of our team directly on 020 8949 5522.