Don’t let company car taxes give your business the red light
When operating a small- to medium-size business, you’ll face many expenses that could be written off as tax deductions resulting in a lowering of monthly and yearly overheads. Costs like rent, inventory, payroll and utilities are some areas where you can claim when filing your taxes. In this article, we’ll discuss company car tax and business car hire and give your business bank account the green light.
Is a company car hire beneficial to my business?
You’ve heard the saying “Why buy a book when you can have a whole library?”. This mentality is a perfect reflection on the question of whether a business car hire is the right choice for your business.
- When you hire company cars from SIXT, you’ll have access to a fleet of vehicle types your small business or start-up might not have had the budget to buy like box trucks or large passenger vans.
- Avoid spending money on maintenance, licencing and upkeep associated with owning company cars which will reduce monthly expenses and headaches.
- Have access to 24-hour support for emergencies.
- Take out extra cover and ensure the safety and security of your precious products on the move.
- With so many branches in so many locations, you’ll be part of a huge network making getting business done from one place to another effortless.
- The well-being of your staff should be at the forefront of your mind, and company car hire keeps employees’ expenses as low as possible because company car tax won’t be subtracted from your taxable income.
What is company car tax and how does it affect your business?
You’ve decided to take a new job, and because you’re so good at what you do, you have the choice of two different positions in two different companies; one of the jobs includes a company car, so the decision’s a no-brainer right? But this is not always the case. Having a company car can be a huge expense for an employee and their employer. The amount of tax you’ll pay on your company car is a tricky calculation that includes factors like how much you earn annually, the CO2 emission bracket of the vehicle and the P11D value of the vehicle. The model of the car and whether it runs on diesel or petrol, or is electric, will also increase or decrease your company car tax amount. Typically, a company car tax increases the cost of running a company car for both the employee and the employer by anything up to 20%. Sounds steep and it is, so why worry when you can bypass this cost as the penny drops on the perfect solution… company car hire.
How is a company car a fringe benefit?
Luckily, a company car is classified as a fringe benefit, which helps employers recruit, motivate and keep high-quality staff on the payroll. The concept can be a bit complicated but let’s break it down together. As an employee who has a company car as part of your employment package, you’ll often be allowed to use it for personal tasks. You are required to keep a comprehensive track record of your mileage and indicate how much you have driven for the company and how much was for personal activities. The value of the personal use of the vehicle is taxable and will be calculated on either a per-mile basis or a fleet-average system. If you are a business owner or self-employed and using your personal vehicle for business, you’ll need to keep a record of how much mileage is used for work in your personal car. According to the HM Revenue & Customs “If you use your own vehicle or vehicles for work, you may be able to claim tax relief on the approved mileage rate. This covers the cost of owning and running your vehicle.” We recommend you check the current HMRC rules on company car tax at least once a year as they change frequently. If you need a personal vehicle for work or a work vehicle to take the kids to school, you’ll be happy with the cost-effective options available for you at SIXT.
What is the best rental option for my business?
So now that we know what company car tax is and how it affects our business and personal life, you know that a SIXT car hire is the smart choice to help keep tabs on expenses like company car tax and make getting work done feel less like business and more like pleasure. Now the next thing we need to look at is which type of car is the right choice for your type of business needs.
- Truck rentals – A perfect choice when moving products from one location to the next. Truck hire gives you the freedom to move multiple products or smaller quantities at one time, without facing penalties associated with freight good transportation on smaller loads. You also won’t have to wait for a container to fill up before you can transport your goods, or face delays due to multiple stops along the way.
- Passenger vehicles – If moving people is your business, you’ll be more than happy with our passenger van options. Seating up to 10 people, our minivans and passenger vans are modern, well-maintained vehicles so you can be sure your guests arrive safely and in comfort.
- Luxury car hire – Imagine the cost implications of company car tax on luxury vehicles. Well, you don’t have to when you hire a luxury car from SIXT. Don’t cut back on a great impression when you choose to cut back on your company expenses and hire a luxury car to entertain those new clients.
How can SIXT help?
We are world leaders in providing mobility services for any type of business, from small startups to large corporate companies. SIXT provides imaginative global car rental assistance that is reasonable, flexible and affordable on premium vehicles making it easy for your company to rent high-class vehicles without breaking the bank.
Here are some of our services that will get you moving without hassles like company car tax.
- SIXT car hire allows you to choose from a wide range of vehicles to suit your business needs, with flexible rental agreements for either one day or for long-term car hire, which will help reduce costs even further.
- SIXT+ is a car subscription service that will allow you to have a vehicle for as long as you need and cancel on a monthly basis. It fits your company’s needs and provides different vehicle types for different jobs, protection policies for different business car hires and monthly mileage packages that keep profit margins high.
- SIXT ride will come in handy when you are taking your new partners out on the town. Ride around in an impressive vehicle with a pre-booked professional driver so you can sit back and relax.
In short, company car tax can be complicated, but it doesn’t have to be when you make the right choice of business car hire with SIXT. Our flexible services allow new and old businesses to make business car hire timely and inexpensive. Decide on a car hire plan that matches your needs and expectations and propel your business into unlimited success without worrying about complicated hidden expenses and piles of paperwork.