HomeHome SearchSearch MenuMenu Our productsOur products

Today our experts answer two of your burning company car questions

by , 19 June 2014
A company car is a vehicle your company provides an employee for business purposes and sometimes private use.

But don't be fooled by this simple definition. Dealing with company cars is complex - and not just when dealing with PAYE! The questions our tax experts get on this topic are proof of this.

Continue reading to discover our expert's answers to two burning company car questions.

*********** Advertisement ************

Avoid costly tax issues

Don't pay another cent on expensive tax consultant or lawyer fees.

***********************************

The answers to two very common company car questions

Question #1: My employee wants to buy the car from the company after his right to use it as a company car comes to an end. What should I do in this case?

Tax experts behind the Practical Tax Loose Leaf Service explain that if your company sells the car to the employee at market value or at the depreciated value, your employee won't have a tax liability.

But if your company sells the car to him at a price below the market value, this is a taxable fringe benefit. Your employee will have to account for tax on this.

Also check out this article. It explains further what you need to do when an employee wants to buy a company car.

Question #2: What happens with a leased car? We want to buy the car on behalf of the employee. The agreement is that he must pay us back. I want to know if there's a tax saving here.

According to our experts, in the case of a financial lease, you must register the lease in your name as an employer. Your company will own the car and the vehicle will remain a company car, even if the intention is that your employee will buy it from the company.

If your company pays the premium on the employee's behalf and recovers the premium amount from him (without giving him a benefit), he won't be taxed on this. After all, the situation would be the same as if he (employee) had paid the premium himself.

There you have it. We hope these answers have given you some clarity on company cars.

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.



Related articles




Related articles



Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>