Directors may incur expenses when on the company’s business. Most travelling expenses involve the cost of running a car.
It used to be a good tax planning idea to have the company own a car and allow the director to use it for both business and private purposes, as the rules for taxing directors on their private use of a company car were very generous.
These rules have been made progressively more punitive over the years and it is now very unlikely to be beneficial for a director who also owns the company, to have a company car.
There is no substitute for doing the figures for the individual director and car, but it nearly always turns out that he will be better off owning the car privately and charging the company for his business mileage.
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