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Saving Tax on Business Travel with Cars, Vans and Motorcycles

A Handy Guide about... 

In a nutshell

This book shows the simple measures you can take to minimise your business travel tax bill. It provides tips on how to make your travel more tax efficient and highlights the traps to watch out for. You'll quickly see where savings can be made, always in a legally secure way. It's essential reading for every business.

In detail

This book guides you through the tax rules that apply to the different modes of transport and travel available to your business. It covers:

  • Travel-related expenses
  • Company cars, vans, motorcycles and other vehicles

It's split over several easy-to-navigate sections. Each one dealing with a different aspect of business travel:

  • Differences between directors, employees and the self-employed
  • Reclaiming VAT
  • Capital allowances rules
  • Special rules applying to vehicle leasing
  • National Insurance implications

Business travel in its various forms has long been one of the HMRC's most fruitful hunting grounds. If it can find a way, it will tax it. In no-nonsense language, this book helps you bypass HMRC to get the most out of the tax system.

We've created this Handy Guide especially for... 

Business owners, directors, in-house accountants, financial managers, transport managers that want to:

  • Minimise their business travel tax bill in a legally secure way

Tax advisors that want to:

  • Help their clients find their way in the maze of tax rules and regulations that apply to business travel

In this Handy Guide you'll read about...

Table of contents

Introduction

Chapter 1 - Directors and employees

1.1. What is the position for employers?

1.2. Are payments for business travel expenses taxable?

1.3. Is there different tax treatment between directors and employees?

1.4. What is “lower paid” employment (prior to 6 April 2016)?

1.5. Is tax relief due on travel expenses?

1.6. Do you have to reimburse all your employees’ travel costs?

1.7. What costs make up “travel”?

1.8. Can you reclaim VAT paid on travel expenses?

1.9. Getting the most out of a business trip

Chapter 2 - Travel expenses

2.1. Introduction

2.2. What journeys qualify for the exemption?

2.3. What is a business journey for tax purposes?

2.4. What are the “commuting” rules?

2.5. What is “triangular travel”?

2.6. What about travel to training courses?

2.7. Homeworking

2.8. Are there exceptions to the home-to-work travel rules?

2.9. Late night travel

2.10. Can extra tax relief be claimed for car sharing?

2.11. Are there special rules for disabled workers?

2.12. Are there special rules for overseas travel?

2.13. Are there tax breaks for works transport and bus services?

2.14. What if public transport is disrupted?

2.15. The travel rules in summary

Chapter 3 - Travelling and working abroad

3.1. Introduction

3.2. Are travel costs tax deductible or exempt where your job is based abroad?

3.3. What are the rules for travel between overseas employments?

3.4. What are the rules for UK employees travelling abroad on business?

3.5. When can you claim a tax deduction for travel for your family?

3.6. What are the special rules for non-domiciled directors and employees?

Chapter 4 - Scale payments and allowances

4.1. What are “scale rate” payments?

4.2. What are HMRC’s benchmark scale rates?

4.3. What are incidental overnight expenses?

4.4. Can you agree your own scale rates?

4.5. Are there special rules for foreign accommodation and subsistence?

4.6. HMRC’s mileage rates

4.7. Advisory fuel rates for company car drivers

4.8. What is the VAT position on scale rates and authorised mileage allowances?

4.9. Do you need to tell HMRC you are using benchmark or scale rates?

4.10. What records do you need to keep if you pay scale rates?

4.11. Exemptions and allowances for parking and bicycles

Chapter 5 - Company cars

5.1. Introduction

5.2. When is a company car chargeable to tax?

5.3. How is the amount of the car benefit tax charge calculated?

5.4. Who is taxed on car benefit?

5.5. What is a “car” for tax purposes?

5.6. What is private use of a vehicle?

5.7. What is the tax treatment of pooled cars?

5.8. Car benefit: how to calculate the tax charge

5.9. How is the car benefit calculated on classic cars?

5.10. Are there special car benefit rules for disabled drivers?

5.11. What is the tax treatment of replacement cars?

5.12. Ex-employees

Chapter 6 - Private motoring - car fuel

6.1. What are the tax charges for providing fuel for private motoring in a company car?

Chapter 7 - VAT

7.1. Public transport

7.2. What is a car for VAT purposes?

7.3. Can input VAT be reclaimed on the purchase of a car?

7.4. When will HMRC accept that a car is exclusively for business use?

7.5. What is the procedure for reclaiming VAT on the cost of a car?

7.6. What if you adapt the vehicle so that it’s no longer a car?

7.7. What about cars bought as company cars for employees?

7.8. What does HMRC consider as private use for VAT purposes?

7.9. Are there such things as pool cars for VAT?

7.10. What is the definition of a business journey for VAT purposes?

7.11. What happens if you subsequently make private use of a car on which the input VAT has been reclaimed?

7.12. Are there special VAT rules for leased cars?

7.13. What is the cost of a new or second-hand car for VAT purposes?

7.14. Can VAT be reclaimed on vans and other vehicles?

7.15. How much VAT can be reclaimed on maintenance and repair costs?

7.16. Can VAT be reclaimed on the cost of a personalised number plate?

7.17. What are the rules for VAT on fuel used for private mileage?

7.18. Mileage payments and VAT

7.19. What records are needed to reclaim VAT on fuel?

Chapter 8 - Vans

8.1. Is there a tax advantage to driving a van?

8.2. What is a “van” for tax purposes?

8.3. What is the taxable benefit in kind for the personal use of a van?

8.4. What is the tax charge?

8.5. What counts as business travel?

8.6. When can a van be provided tax free?

8.7. When is private use insignificant?

8.8. What is the restricted private use condition?

8.9. What counts as a pool van?

8.10. What is the position regarding electric vans?

8.11. Is the charge reduced if the van is unavailable?

8.12. What is the position if a van is shared?

8.13. Is the charge reduced if the employee makes payments for private use?

8.14. Is there a further charge on a replacement van?

8.15. Is there a charge on fuel for private journeys?

8.16. Is there a tax-free approved mileage allowance for vans?

8.17. What are the tax rules for occasional van hire?

Chapter 9 - Self-employed

9.1. Introduction

9.2. How is tax relief given on the cost of a vehicle used for business?

9.3. What travel expenses are allowable for tax?

9.4. More than one business purpose?

9.5. Place of work

9.6. Place of work case studies

9.7. Proportion of expenses

9.8. Expenses on food and drink

9.9. Is the cost of overnight accommodation allowable?

9.10. How should disallowed travel expenses be reported?

9.11. How do you calculate tax deductible motor expenses?

9.12. Is there a different tax treatment for cars, vans and other vehicles?

9.13. Can you claim that your vehicle is used 100% for business purposes?

9.14. Can you reclaim input VAT on the purchase cost of a car?

9.15. What if you use your vehicle to advertise your business?

9.16. Can tax relief be claimed for motoring fines, etc.?

9.17. Are the congestion charges treated as tax allowable?

9.18. Why is extra care needed in calculating motoring expenses?

Chapter 10 - Capital allowances

10.1. Introduction

10.2. What are capital allowances?

10.3. What are the basic rules?

10.4. What is a car for capital allowances purposes?

10.5. What is the cost of a car for capital allowances?

10.6. How do pools apply to cars bought on or after 1 April 2009?

10.7. How does the 100% allowance work for low emissions cars?

10.8. How does the special rate pool work?

10.9. How does the main car pool work?

10.10. How are capital allowances calculated for unincorporated businesses?

10.11. Are pooling rules good or bad for tax?

10.12. Can you create a single asset pool?

10.13. How do pools apply to cars bought before 1 April 2009?

10.14. What allowances are there for commercial vehicles?

10.15. What’s the annual investment allowance?

10.16. Writing down allowances

10.17. Small plant and machinery pool write-off

10.18. Can you claim balancing allowances when you reorganise your company?

10.19. What are short-life assets?

10.20. Interaction between capital allowances and simplified expenses system?

10.21. Can employees claim capital allowances if they use their own cars for business?

Chapter 11 - Vehicle leasing

11.1. Are there special tax rules for leasing vehicles?

11.2. Which vehicles are affected?

11.3. Which types of car lease are affected?

11.4. When is the deduction for rental payments restricted?

11.5. Is tax relief allowed in the year the lease payment is made?

11.6. Are there different rules for payments under maintenance contracts?

11.7. How are lease payments affected by VAT?

11.8. Should you lease or purchase?

Chapter 12 - Motorcycles and other forms of transport

12.1. What is the tax treatment of motorcycles?

12.2. Are any other vehicles covered by the same rule as motorcycles?

12.3. How are motorcycles and other vehicles taxed?

12.4. What if the vehicle is used for business purposes?

12.5. Can you claim the costs of the vehicle against tax?

12.6. What if the employee uses their own motorcycle for business journeys?

12.7. Does the simplified expenses system apply to motorcycles?

Chapter 13 - National Insurance

13.1. Introduction

13.2. What does NI apply to?

13.3. How much NI is payable in respect of company cars?

13.4. Will you receive tax relief on Class 1A contributions?

13.5. What is the NI position on travel expenses?

13.6. NI trap for employees

Chapter 14 - Tax planning and saving

14.1. Tax planning for cars - introduction

14.2. What makes a company car tax efficient for employees?

14.3. Is using a privately owned car for business more cost efficient than a company car?

14.4. Is fuel for private mileage in a company car a worthwhile benefit?

14.5. What is the cost of a company car for employers?

14.6. Are there tax advantages to the car leasing rules?

14.7. How much tax can you save with low emissions cars?

14.8. What is the tax position if you sell your car to the company?

14.9. Other savings with low CO2 cars

Chapter 15 - Appendices

Appendix 1 - Emissions table

Appendix 2 - Fuel scale charges for VAT

Appendix 3 - Company cars - advisory fuel rates

Appendix 4 - Vehicle excise duties

Chapter 16 - Documents

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