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Where Taxpayers and Advisers Meet

Company car capital allowances.

AGB22
Posts: 3
Joined: Sun Mar 11, 2018 11:02 am

Company car capital allowances.

Postby AGB22 » Sun Mar 11, 2018 11:10 am

I wondered if I could please get some advice. I’ve recently changed my company car and have been on the HMRC website to remove my last vehicle and put the new one on. It’s a task the lease company have told me they will do but past experience and paying tax on two cars at once in the past as meant I now try and sort it out myself. My question is about capital allowances, I haven’t paid any lump sum towards the car but I do top up the lease payment my company makes to a figure of about £34 per month to pay for a slightly higher spec of car and a couple of options. Does this count as a capital allowance in any way and do I register it on my change of car details for the HMRC ? Thank you.

bd6759
Posts: 2792
Joined: Sat Feb 01, 2014 3:26 pm

Re: Company car capital allowances.

Postby bd6759 » Mon Mar 12, 2018 1:22 am

I think you mean "capital contribution", not capital allowance which is a completely different thing.

I don't think that a regular contribution can be a capital contribution.

AGB22
Posts: 3
Joined: Sun Mar 11, 2018 11:02 am

Re: Company car capital allowances.

Postby AGB22 » Mon Mar 12, 2018 8:49 am

bd6759, sorry yes I did mean a capital contribution, thank you for the response . I thought I’d check as the HMRC guidance seems a bit vague.

MichCat
Posts: 39
Joined: Sat Dec 10, 2016 5:01 pm

Re: Company car capital allowances.

Postby MichCat » Mon Mar 12, 2018 9:32 am

Is the £34 deducted from your pay after tax and ni? Depending on the exact agreement, it may qualify as 'employee payments towards private use'. Check with your payroll people how they intend to show your contribution on your P11d and then you can do the same when you contact HMRC. Also, if your company uses a large lease company, they often show the tax implications on their quote, check to see if they have treated the £34 as a private use contribution.

AGB22
Posts: 3
Joined: Sun Mar 11, 2018 11:02 am

Re: Company car capital allowances.

Postby AGB22 » Mon Mar 12, 2018 12:45 pm

Thank you you MIchCat, I think the payment is pre tax but I’ll look into it. I think it may be worth checking against my next payslip

bd6759
Posts: 2792
Joined: Sat Feb 01, 2014 3:26 pm

Re: Company car capital allowances.

Postby bd6759 » Mon Mar 12, 2018 10:05 pm

It is not a payment for private use: you said it was a payment towards a better car.

Whether a cpaital contribution or a payment for private use, it must be post tax.

MichCat
Posts: 39
Joined: Sat Dec 10, 2016 5:01 pm

Re: Company car capital allowances.

Postby MichCat » Mon Mar 12, 2018 10:48 pm

It is not a payment for private use: you said it was a payment towards a better car.

Whether a cpaital contribution or a payment for private use, it must be post tax.
I have seen many large companies that offer an upgrade on company cars. The thorough ones make sure that they state in any agreement that they will expect a 'contribution towards private use' if you upgrade the basic package. Very common with the large lease co's e.g. Arval etc. They are shown as such on the P11D and I have not seen them queried by HMRC....yet!

MichCat
Posts: 39
Joined: Sat Dec 10, 2016 5:01 pm

Re: Company car capital allowances.

Postby MichCat » Mon Mar 12, 2018 10:51 pm

Thank you you MIchCat, I think the payment is pre tax but I’ll look into it. I think it may be worth checking against my next payslip
If it is pre-tax, it would not be taken into account as this is just effectively reducing your gross pay for a more expensive car.


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