Employees love nothing better than receiving one as part of their role.
For entrepreneurs and business owners, it’s also the perfect occasion to show off.
Indeed, a commercial car, or as it happens a whole fleet of business vehicles, can make a real difference, for your business reputation and your visibility as a brand. However, it’s fair to say that for small and medium businesses, the idea of buying cars can seem like a poor investment choice, unless you work in the transportation industry. However, you don’t need to run a multinational corporate to get your own car fleet. Here’s how to make it work.
How you should finance a professional vehicle
It is important to understand that when you decide to buy a car through your LTD, there will be tax regulations and professional responsibilities to respect. Indeed, the purchase of a business vehicle has nothing to do with buying a personal car. For instance, you can’t reclaim the VAT of a car that is available for personal use, unless if specific situations. Additionally, the CO2 emissions of the car affect its final cost to the company. Last, but not least, buying through your company means that you can take a business car loan instead of a personal loan. This loan can be deducted from your company’s tax return.
Your car, your brand
The main reason why you should consider a business car is to increase the visibility of your company. Indeed, if you or some members of your teams are often on the road as part of their jobs, it’s easy to understand how you can use the car as part of your marketing strategy. With tailored car wrapping solutions you can transform a standard business car into a branded vehicle that might attract a few leads. People might not call you as soon as they drive past the car, but it’s a helpful strategy to get your brand noticed and encourage trust.
Understand the costs you can claim
If, so far, you’ve been using your personal car for business travels, you’ve probably come across the mileage calculation table used by the HMRC to help you claim business mileage deduction. You can, of course, continue to claim mileage on a company vehicle. However, the company will need to use a different rate. Additionally, there is a fuel benefit tax for company vehicles that needs to be paid by the employee who drives the car or by the company is the car is part of a pool available to all.
Keep track of your mileage and expenses
Protecting your business
Finally, with a company car comes the need for specialist insurance cover, especially for pool cars that can be used by one or more employees. You might also want to add the company car to your liability insurance cover. You can never know what could happen, so it’s best to take no chances on these matters. Additionally, it is the responsibility of the company to maintain and service the business vehicles. Failing to comply could put your company at risk of facing legal actions.
As a company, business cars are a commitment to the future. It’s an investment you want to take seriously, from your financing options to ensuring the safety of all drivers and bystanders.
