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How to claim for vehicle and travel expenses when you run a limited company

If you have a limited company there are two ways to work out how much tax relief you can claim on the costs of using a car or other vehicle in your business.

When the company owns the car

The company can purchase the car, and then claim tax relief on the actual costs and running expenses. The vehicle can only be used for business purposes, otherwise Benefit in Kind (BiK) rules will apply. The user will owe personal tax, and the company will need to pay employer’s National Insurance.

When you own the car personally

The second method means you will own the car personally, and then charge your mileage to your company. This method is generally more efficient, unless the vehicle has extremely low or zero emissions.

Watch our video for more information about claiming tax relief on the cost of using a vehicle in your limited company, or chat to the team about our online accounting services for limited companies.

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