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Company cars and tax breaks...

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  • 19-09-2005 1:20pm
    #1
    [Deleted User]
    Posts: 0 ✭


    ...I'm self employed.

    Anyone know about this tax relief on company cars thingy, what are the tax breaks, what are the limitations, and what's the procedure.

    Thanks


Comments

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    #2
    BrianD
    Closed Accounts Posts: 7,221 ✭✭✭BrianD


    Try looking at www.revenue.ie they have a lot of guides there or your accountant should be able to advise the most tax efficient way of operating your car. Bear in mind that a company car is seen as "benefit in kind" and subject to taxation. I'd imagine that there is some way of softening this for the self-employed.


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    #3
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Thanks Brian, will check the link...


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    #4
    kluivert
    Registered Users Posts: 2,399 ✭✭✭kluivert


    Do you have your own company (director) or are you self employed?

    If your are a director i believe its more sufficent to have the car in your name and claim and a travel allowance. This depends on the type of industry you are in but you can use the civil service rates as a benchmark (€6000+). The figure is more than this, i dont have the rates infront of me, again www.revenue.ie for them.

    Alternatively again you keep the car in your name and the company can pay for the running expenses of the car + mileage. Choose which ever option is best for you.

    If you have the car in the name of the company - the companys advantage as fair as i can see at the moment is that the company can avail of capital alowances to the value of €22,000.00. As for you well you get to pay BIK. :(

    If you are self employed well then your business will pay for all expenses for the car. When it comes to do your self employed tax return - you take your profit figure and add back a portion of motor expenses that relates to private use

    Profit as per Accounts XXXX

    Add Back: (Elements for private use)
    Motor xxxx
    Light and Heat xxxx
    Depreciation xxxx (xxxx)

    Tax Adjust Case 1/2 Profits XXXX

    Less: Capital Allowances (xxxx)

    Please note that if you are self empoyed (Sole Trader) get the business to buy the car and claim capital allowances as well. No BIK as you are not a director of a company.

    Hope that helps....

    Even anyone can add more detail to this please do so for a better quality answer for this gentleman.


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    #5
    DublinWriter
    Registered Users Posts: 9,557 ✭✭✭DublinWriter


    I'm self-employed and for me, it's much more efficient to pay myself milage at the Revenue prescribed rates than purchase a car through my company and pay BIK as part of my personal tax.

    It really depends on the milage you think you're going to run up and the size of the car engine. For smaller milages (say around 1K-2K miles per annum) I generally find paying myself milage on my personally-owned car to be more efficient.

    If you think you'll be running-up light years on your car then I'd definately consider the company-car route.


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