Car for Your Business

A car can be a valuable asset to any business. It can be used to take clients for a property inspection or a business meeting. It can be driven to visit prospect suppliers and buyers, and as a delivery vehicle. It can be an advertising tool as in the case of vehicle wraps and mobile posters. It can also be made as a status symbol for company employees. In addition, a company or business car can be a tool for enjoying lower taxes.

If the vehicle is used solely in your job or business, you may deduct its entire operational cost from your taxable income. If you use the car both for personal and business purposes, you may deduct its operational cost related to business. You can calculate the amount of deductible car expense either through the standard mileage method or the actual expense method.

In the United Kingdom, changes were introduced on company car tax in April 2002. In accordance with the government's effort to reduce pollution, taxation is now imposed against carbon dioxide emissions. This means that cars, which emit extra gases, will suffer tax increases. Before that, company cars were taxed using the standard mileage method. Also under the new law, workers have to pay tax on car benefits that they can use for both personal and company reasons. If you are a business owner, this cues you to upgrade your fleet and go for environmentally friendly cars. You may also consider replacing car benefits with salary increases, to shield your employees from the tax changes. This will encourage them to buy cleaner yet cheaper cars. By doing so, the company car tax changes will be favourable to you, your business, and your workers.

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