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Seven things every business owner needs to know about company cars

by , 27 June 2014
As you know, a company car is a vehicle your company gives an employee for business purposes and sometimes private use.

When it comes to company cars, experts behind the Practical Tax Loose Leaf Service always say: 'Before you consider handing your top exec the keys to a company car, it's important for you to know how to treat the use of this car on your payroll.'

They say this for a good reason.

You see, if you don't know when and how to tax the use of a company car, you could end up under-deducting Pay As You Earn (PAYE).

This is the last thing you want because making this mistake means a 10% penalty from SARS is coming your way.

The good news is our experts have got you covered. Today they reveal seven key things you need to know about company cars so you can avoid SARS penalties.

Let's take a look.

If you're a business owner, you can't afford to not know these seven things about company cars

According to the experts behind the Practical Tax Loose Leaf Service:

#1: You can shrink the fringe benefit tax if your employee doesn't use your company car all the time.

#2: If your employee uses the company car regularly for business purposes, even after hours, you can escape the fringe benefits tax hook.

#3: SARS will let you reduce the fringe benefit tax on your company car from 80% to 20% in this one instance…

#4: If you let your employees use more than one company car, you must apply this method to work out their tax…

#5: This is the correct way to tax an employee who started using the company car midway through the month…

#6: You can claim the input tax on the purchase or rental of these seven vehicles.

That's not all.

#7: If you still need more clarity regarding company cars check out this article. Here, our experts answer two of your burning company car questions.

There you have it: We hope these seven things will make you understand the tax treatment of company cars better.

PS: Put a stop to all your company car and travel allowance headaches today with this one tool!

Get the answers to your biggest company car and travel allowance questions right now and avoid being hunted down by SARS for making costly mistakes.

Click here to get 69 solutions that'll put your company car and travel allowance headaches to rest.

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