congratulation! Your company has been successful for some years, and you have made enough profits to start the expansion. Perhaps you now want to buy a fleet of company cars to provide reliable transportation to your employees.
This can be a big investment, but it is often worthwhile. Your employees will love walking around in a luxury vehicle and will be strong enough to work with you, and your customers will appreciate the professional cars that the company car says.
Here's some information about the process involved Invest in company carsImportant factors should be kept in mind, and how to get started.
Red tape around company cars
Unfortunately, getting a company car is not as easy as buying a lot and handing the keys to your employee. There are some legal hoops to jump, and the first person should be clear: tax.
The main tax that you have to keep in mind is the fring profit tax. This is what taxes that the employers pay for non-pay related benefits, which is usually a company car. It is different from income tax, and there are two ways to calculate how much you will have to pay.
- The first method is called the statutory formula method, and it is based only on the price you paid for the vehicle initially.
- The second option is the operating cost method, which calculates the outstanding taxes based on the operating costs of the vehicle. For this option you have to document all operating costs with vehicle operating book.
While the second option can save you money for a long time, you need some legowork to keep a record for your part as well.
Company tax benefits with tax and tax deduction
The good news about company cars is that they do not qualify for capital gains tax, even if you sell it. To review, tax on non-inventory goods, such as property or any profit made by selling capital, is taxed on capital gains.
Another piece of good news is that you are allowed to claim your company-car expenses as a deduction on your taxes. Again, it requires a detailed log book that keeps track of expenses related to all your cars. Details about each business trip are required during any 12 week period in the log. It includes any number of kilometers along with the number of kilometers Maintenance And fill the cost.
Buy new, used, or lease?
If you ask ten business owners that the company is the best option for buying a vehicle, then they will give you a combination of these three options: new, used, or lease. The truth is that the best option for you depends on you.
Your needs, your long-term plans with the car, and the amount in which you can invest in the beginning is an important factor.
Buying a new company car is the easiest option, but it is clearly the most expensive. It is recommended only for those who have the capital to do this without hurting the cost.
Most of the time, people are looking for a new model on the decision on the company car, but there are options for the budget.
Sometimes you can look at auto sales locations, such as Auto wreckers in MelbourneFor very good deals on used cars, which you can buy directly. And what is convenient about such places is that you can sell your company car back in spite of the condition.
Another option is leasing cars. This is a good option if you can pay additional monthly payments of your other overhead.
There is a lease option that many businesses call optical leasing. This is a three-way strap consisting of financiers, employers and employees who will use the car.
In fact, the company agrees to hire a car on behalf of the employee, and then reduces the payment from the employee's salary.
Keeping in mind is the most important thing to be in your financial means. After a while, there is no point in buying a company car fleet to get out of business!
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