What Are The Benefits That Accrue To Company Car Taxation
There are many benefits that come with company car taxation. However, it is very important to know what this entire process is all about. You find that the best way of understanding how this process works is to first define what it is and then work down to the nitty gritties of how the entire process works right down to the benefits that come with using this system. The company car taxation system is where a company provides its employees with a brand new car. All other services are included in the package as well for instance detailing and the occasional tune up of the car. This article critically examines the benefits that come with subscribing to this system. By the end of it, you should be familiar with the concept of company car taxation and some of the benefits that actually come from this form of taxation.
The first advantage that comes with company car taxation is that the older the car and the more the mileage on it, the more the leeway the government will give you. In most countries where the most companies are looking to cut cost, they will provide you with a model that will run very well but has a few miles on it. It is only on those very minimal instances that you will find that a company will provide an employee with a very new car. In cases like when the employee has been promoted, the better way to show an improvement in status is to provide them with a new car that fits the status change.
Most of the car leases can be deducted from tax. This in turn saves the company a lot of money when it comes to crunching the numbers; any way of reducing expenses is welcomed considering that the economy is still reeling from the effects of the economic crisis that shook the world (and continues to shake the world markets). Company car taxation is one prime example of how this is done. When you are looking at this entire process, basically the company pays a very small amount for you and you pay for part of the lease. The amount the company pays for can be recouped since the price is usually minus GST.
Another benefit that comes from company car taxation is that fuel benefits are inclusive when you use the company car. In an effort to promote the use of environmentally friendly fuels and cars that save fuel, the government has introduced a fuel benefit. This benefit is usually calculated annually and more and more companies are encouraged to adopt this particular way of doing things.
Overall, there are many benefits that come with company car taxation. It is very important that you visit an accountant or a financial consultant so that they can point you in the right direction in regard to which form is in your favour in the present economic circumstances we are in.