Can pay my wife a monthly fee (simalar to a lease) for using her car for my Ltd company?

Question

Can pay my wife a monthly fee (similar to a lease) for using her car for my Ltd company? Please can someone clarify the tax position on this as I would like to further reduce my corporation tax. Many thanks.

Answer 1

You can, but then your wife would have to declare that lease income as income on her tax return.  She could lessen that income burden by claiming depreciation expense, but you'll get in a sticky situation if she or you also use it for personal reasons.  You're probably better of just deducting miles on the per mile expense allowance.

Answer 2

Rubbish answers so far.

You can pay her 40p pm for the first 10,000 miles and 25p pm thereafter for suing her car on company business. She would need to complete an expense claim form which you will file with your other invoices. This will not be taxable. Round sum allowances are taxable, however.

Answer 3

i think you would be on very shaky ground with the tax man, your wife would have to declare the earnings either by setting up her own "lease" company, she would have to let the inland revenue know that she was earning extra money, with tax you can put whatever you want in your return, its only when they start asking questions that you have to be pretty sure you are not avoiding or evading them!

  why haven't you go an accountant? ( i know their fees and charges are definately tax deductable).