Company paying car for Director

[MARKYWEB]

Is it correct that if a Director buys a car in his name rather than the company because it's only commenced trading then it must be classified as a loan to the Director and not a company car even if it's basically just used for business. The company also pays for the fuel through the company bank account. Is the only option for the Director to produce a mileage log and claim business mileage to offset part of the monthly finance payments accounted for in his director's account.

So could someone confirm that the only way to clear this overdrawn loan account is to pay a dividend or bonus. I'm sure I read somewhere that it's not a benefit if under £10,000.

In summary is the car a) a loan to the director b) must be cleared by a dividend, bonus etc c) Is not a benefit in kind if under £10,000 d) the only claim deductible for the company is the business travel e) The company only reimburses the mileage less any fuel already paid.

Is there anything else to consider.

[bd6759]

a) The funds used to purchase the car can be treated as a loan. Debit the DLA with cost.
b) The DLA can be credited with salary, dividends, bonus, or an inheritance from his long lost auntie. There is no "must" about the source of the repayment.
c) There is no beneifcial loan if it is under £10,000. Are you aware of s455 tax which the company has to pay?
d) & e) The company can claim the full amount of the fuel cost, but the director will be taxed on it. The best way is to Dr the cost of fuel to the DLA and Cr the DLA with the mileage allowance.

[MARKYWEB]

Thanks bd, much appreciated.