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Our client spends about £12 000 a month on executive car hire for its two directors.
On the assumption the cars are always available for the two directors one would think that the rules relating to chauffeur-driven cars could apply but as the cars are not owned by the company it is difficult to apply the pooled car guidance published in Hansard.
If the journeys are mainly home to office how would this be reflected on the P11Ds? Alternatively would the problem be solved by not claiming a deduction in the company and by posting the expense to the directors’ loan accounts?
Such a high charge seems vulnerable to a challenge under ‘wholly and exclusively’ principles but the company does operate in an industry where high-class vehicles are normal and are therefore regarded as a justified expense.
Can readers advise please?
Query 17 981...
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