The costs of operating a vehicle, whether privately or as part of a business, are growing all the time. This can put a lot of strain on the wallets of people everywhere and on the balance sheets of businesses all across the UK.
Whether you own and operate a business that uses or provides cars, are a sole trader operating your own commercial van, or drive your own car as part of your job, there are some things you need to know. You may be missing out on potential savings or paying costs your employees or employer should pay.
The responsibility for insuring a vehicle can fall on the employer or the employee, or whether you are a sole trader. Liability for van or car insurance depends upon who owns the vehicle and if it is sometimes used for personal journeys.
Whoever is insuring the car should look for the best deal possible to reduce costs, and make sure they are covered in case of an accident, fire, or theft. Comparison sites can help businesses, employees, and sole traders save money on car insurance. If you need car insurance in Northern Ireland, you need to find deals on exclusive offers that will help you to cut costs. See example above.
Claiming expenses and tax
Operating vehicles as part of a business creates a lot of expenses, and each of them comes with an opportunity to claim back the taxes you pay on these costs. Buying or leasing vehicles have different tax incentives that you should investigate, as do road tax and maintenance costs.
Responsibility for these costs, and who can claim tax back using these schemes, will depend again on ownership. The full cost of leasing a vehicle can be claimed as a business expense, making it the most popular option for small businesses and sole traders.
Make fuel expense claims
Every year, many people fail to claim expenses for the fuel they use to power their business. For sole traders and company vehicles that are mostly for personal use, there is a significant amount of money left on the table.
Her Majesty’s Revenue and Customs (HMRC) allows for legitimate business travel to be claimed at a rate of 45p per mile. This is worth £4,500 a year alone, but you can also claim 25p for every mile over the initial 10,000.
Electric vehicles give the best return on investment
EVs of all shapes and sizes are becoming more common across the UK, as is the charging infrastructure to support them. This is making electric vans and cars a much more viable choice for businesses big and small. There are tax incentives available for EV purchases for both business and personal vehicles too.
In just a few years the savings you make on fuel costs, road tax, and maintenance help EVs to start paying for themselves quite quickly, compared to their petrol-powered and diesel-fuelled counterparts.
If you operate vehicles as part of your business, provide company cars, or drive your own car to do your job, there are savings that can be made. You should also make sure you are paying the right costs and claiming the correct expenses.