Can I use a company car for personal journeys? The rules explained
The short answer is yes, fleet car drivers can use a company car for personal journeys – but they must comply with the terms of the agreement. Here's how to stick to the rules.....
There you are, admiring your shiny new fleet car. The boss hands you the keys, so you head off, assuming that you can use it for all types of journeys – business and personal.
In the vast majority of cases, you can. The law places no restrictions on how you use your company car. However, the firm you work for might set some rules that you should be aware of before you start making personal trips. The simplest way to be sure you're not risking trouble is by checking with your line manager or HR department.
The main pitfall to watch out for is if your company tells you the "company cars" their employees use on business must not be used for personal trips. That's usually because for tax purposes the vehicles are being treated as pool cars rather than company cars.
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In those cases, if you use the car as a private vehicle, the car will be regarded as a benefit by HMRC – and that means you should be paying benefit-in-kind (BIK) tax on it. If you’re not, you’re in breach of the law.
And don’t think that "private journeys" only covers the obvious personal trips such as going to the shops at the weekend or on your holiday. No, commuting to and from your place of work is regarded as a private journey. If your vehicle has not been registered as a company car, you should leave it at your place of work overnight and make your own way home.
So, while the short answer – yes, you can use your fleet car for personal journeys is correct – you need to be a bit careful you don't get caught out by company-specific circumstances that could put you on the wrong side of the law.
Who pays for fuel I use on private trips in my company car?
It’s perfectly legal for your employer to cover the cost of the fuel you use privately in your company car, and some do as an additional benefit (usually known as fuel benefit).
However, keep in mind that, again, you’ll have to pay tax on it, in addition to the company car tax you’re already paying on the car you use privately.
What about electricity for electric cars or plug-in hybrids (PHEVs)? Well, if you can claim back the cost of charging up using a home or public charger, you’ll need to pay tax on the cost.
On the other hand, if your firm has workplace chargers you can use, you can use them to charge up without worrying about tax. HMRC doesn't treat that electricity as a benefit in kind, even if it ends up powering personal journeys.
Read more: Advisory fuel rates explained
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