Renting car for contract

[MPwannadecentincome]

Having read various threads on Company cars and Rental cars it seems that in order to comply with HMRC regulations to avoid BIK tax I must not at any time keep the car at my home address.

I do not have a car now but might have to get one to get to a future client site. I understand the points made about Company cars so I would not attempt to avoid BIK there. For renting a car, in order to prove to HMRC there is no BIK should I rent the car on a daily basis - picking it up when their office opens and returning before it closes?

Which of course is extremely impractical as at best they are open 8am to 6pm so its not possible to do a day's work like that.

Or have I misunderstood the threads I have seen?

I'm not really that keen on purchasing a car - once the gig is over I might not need it, also the gig might allow me to work from home some days so the daily travel might not be needed. Public transport alternative is not feasible for gigs outside of London for me.

TIA for any advice!

[SueEllen]

Google "HMRC 480 benefits" then read the pdf booklet "480: Expenses and Benefits- A tax guide"

After that Google "HMRC 490 travel" then read the pdf booklet "490: Employee Travel - A tax and NICs guide"

Make sure both guides are for 2013.

You can also find other info on car leasing which is what you are in effect doing as you are renting for a prolonged period. You need to ensure the car CO2 emissions are less than 130g/km.

[SueEllen]

I should add due to the size of our businesses and the trading address HMRC will not believe that the car is not available for private use. The fact that you haven't used it doesn't matter.

In addition when you hire a car it is very closely inspected for damage. If you don't have a garage to park the car in at both ends of the journey then expect the car to pick up some scratches particularly on the London side. You will then be ripped of by the car hire company in paying for this.

You also don't seem to have a clue that it's cheaper to rent a car for a longer period i.e. a month than for 4 days in the working week.

Personally you would need to get your accountant to calculate whether it was worth it for you and like for company cars it doesn't look like it is due to additional costs you would have to pay especially if you don't want to drive an under powered small diesel on the motorway.

[VectraMan]

Just claim the private mileage allowance. Then you can do what you want: buy a car, rent a car, borrow a car, use it for as much personal use as you want - it won't make any difference.

[dmini]

Just claim the private mileage allowance. Then you can do what you want: buy a car, rent a car, borrow a car, use it for as much personal use as you want - it won't make any difference.

Exactly - easiest and safest way. Personal hire, claim mileage from yourco

[MPwannadecentincome]

ok makes sense!

Thank you all - it makes sense based on info I have given.

I'm not keen on buying my own car but might have to, on the other hand it all depends on what gig I get next. If I only need the car 2 days per week I will probably rent, or if the gig is a long way away I will combine taxi / public transport on Mondays and Fridays.

[MPwannadecentincome]

Google "HMRC 480 benefits" then read the pdf booklet "480: Expenses and Benefits- A tax guide"

....

Make sure both guides are for 2013.

You can also find other info on car leasing which is what you are in effect doing as you are renting for a prolonged period. You need to ensure the car CO2 emissions are less than 130g/km.

hmmm new for 2013 is this...

"Step 8: Reductions for private use
12.38
Payments that an employee makes for the private use of the car are deducted
from the figure carried forward from Step 7 and can reduce the benefit
charge to nil.
To qualify as a deduction:
• there must be a requirement in the year to make payments as a condition of
the car being available for private use, and
• the payments must be specifically for that private use. Payments for
supplies of services, such as petrol or insurance, do not count.
Any payments which the employee makes specifically for the private use of
a replacement car as described in paragraph 12.36 are allowed as though
they were payments for the private use of the normal car in that period."

So if my private use is minimal and I repay the employer (my Ltd co.) the costs for the private use then the BIK can be reduced to nil.

This changes the arguments given doesn't it - at least my understanding of the threads I have read?