Claiming A Percentage Of Car Tax / Insurance

[psychocandy]

There is nothing in tax law that says RAC membership is not a reasonable expense provided it is bought solely for business purposes. Incidental use of business equipment and/or services is permissable without incurring a BIK in any case.

So why don't you try again ?

Boo

But boo its like buying tyres for your car surely? Might think its a business expense but the mileage rate already covers it.

[DirtyDog]

You are certainly right about the RAC; seem to recall somebody tried to take it over a few years back.

The RAC which provides motoring and breakdown assistance is a Ltd company owned by the Carlyle Group - it is not a club.

The RAC in London is a private members club, and used to be the same organization.

The AA used to be a mutual organization but isn't any more - it's a Ltd company as well.

If you have an AA or RAC "membership", it's not membership of a club, it's an insurance policy.

[TheCyclingProgrammer]

If you have an AA or RAC "membership", it's not membership of a club, it's an insurance policy.

Which still gives rise to a personal BIK, just the same as if your co paid for most other personal insurances (health, life etc, except relevant life).

[DirtyDog]

Which still gives rise to a personal BIK, just the same as if your co paid for most other personal insurances (health, life etc, except relevant life).

I agree. I was just pointing out that neither organisation is a club, so you aren't a member of the organisation, no matter how you describe your insurance policy with them.

[ASB]

The RAC which provides motoring and breakdown assistance is a Ltd company owned by the Carlyle Group - it is not a club.

The RAC in London is a private members club, and used to be the same organization.

So my memory wasn't playing tricks. I imagine the members did pretty well then with the roadside services getting spun out.

[Boo]

Hmmm. Surely a bit dodgy? Thats the idea of the flat mileage rate so that it covers EVERYTHING isnt it? Adding things on in addition sounds a bit off to me. Potential trouble here.

Its like saying well normally I get 3rd party insurance but now I'm getting comp so I'm expensing the extra. Or I normally buy cheap tyres but now I've got to get expensive ones.

But boo its like buying tyres for your car surely? Might think its a business expense but the mileage rate already covers it.

No, it is not at all similar. RC and AA membership are not forms of car insurance, they are forms of travel protection insurance. They don't cover a car (mine doesn't anyway), they cover an individual/company. To repeat : my RAC insurance in no way covers my car but instead covers my business against loss of income caused by my car's breakdown. It's similar to a business taking out insurance against a key employee dying unexpectedly : the employee pays no BIK because they obtain no benefit, it is strictly for the companies protection.

Which still gives rise to a personal BIK, just the same as if your co paid for most other personal insurances (health, life etc, except relevant life).

No, see above. There is no BIK on incidental use of goods or services where the primary purpose is for the company. HMRC are very clear about that.

Boo

[Wanderer]

No, see above. There is no BIK on incidental use of goods or services where the primary purpose is for the company. HMRC are very clear about that.

As a general rule, that is correct.

However, there are special rules for using your own vehicle for company business and the rule is that you get a mileage allowance to cover ALL the motoring expenses. If you spend less than that then that's your good luck, if you spend more than that then it's tough tulip.

HMRC Factsheet

What if my actual expenses are more than the tax-free amount?

The tax-free amount is the maximum relief you are entitled to in any tax year. You are not entitled to any additional relief if your actual expenses are more than the tax-free amount, whether for interest payments, business insurance, depreciation or any other payments you may have to make on your car. All of these types of expense have been taken into account when working out the rates above.

[vwdan]

As a general rule, that is correct.

However, there are special rules for using your own vehicle for company business and the rule is that you get a mileage allowance to cover ALL the motoring expenses. If you spend less than that then that's your good luck, if you spend more than that then it's tough tulip.

HMRC Factsheet

What if my actual expenses are more than the tax-free amount?

The tax-free amount is the maximum relief you are entitled to in any tax year. You are not entitled to any additional relief if your actual expenses are more than the tax-free amount, whether for interest payments, business insurance, depreciation or any other payments you may have to make on your car. All of these types of expense have been taken into account when working out the rates above.

Yeah, but he's trying to claim the RAC isn't a motoring expense - which makes perfect sense and I'm sure HMRC and the courts will agree. Just think, Boo, you could set a level precedent and allow us all to sling RAC cover through expenses. Personally, I just falsify the invoices along with the strip club costs - far less hassle than faffing around with 'legality'.

[northernladuk]

Breakdown cover is it included in the 45p per mile? - The Book-keepers Forum

Even the MP's don't claim breakdown cover!!!

MP claims 3p for 0.06 mile car trip - Green Flag Breakdown Cover

[TheCyclingProgrammer]

Breakdown cover is it included in the 45p per mile? - The Book-keepers Forum

Even the MP's don't claim breakdown cover!!!

MP claims 3p for 0.06 mile car trip - Green Flag Breakdown Cover

Boo's argument seems to hinge on his claim that the membership is not tied to his personal car or himself, but rather to his Ltd Co, which is interesting but I'm not sure HMRC would see it that way.

Even if it's being paid by his Ltd, surely he must be named as the driver?

The only way I could possibly see it working is if it was some kind of corporate group membership/business fleet cover that applied to any employee of the company but I would imagine it only applied to company owned cars.