Tax efficient car purchase for PAYE high rate rax payer.

[RichInSpirit]

Is there a tax efficient way for a PAYE employee to purchase a car. Relatively high earner. Doing approx 70k KM per annum. Needs reliable car for job and personal.

(Not asking for myself, I am in a different corner of the market).

 

[TomEdison]

There's no income tax deduction available to an employee who buys a car in these circumstances, if that's what you're asking. In general an employee can get a tax deduction for expenses only if they are incurred wholly, exclusively and necessarily in performing the duties of their employment. The fact that the employee buys the car to use for personal as well job-related purposes means they fall at the "exclusively" hurdle.

As regards the overall tax burden of buying a car, the only way to minimise this is for the employee to buy the cheapest car that will meet their needs, choosing a model that, as a new car, would have attracted a low rate of VRT.

 

[RichInSpirit]

Thanks Tom.