Q&A: tax and lease payments for director’s car

In this week’s VIP Tax Team Q&A, how is tax on lease payments and fuel costs for a director’s vehicle treated under benefits in kind rules when paid through director’s loan account?

The director of a limited company has a company car that is available for private use. The company entered into the lease agreement with the provider and the company pays the monthly lease premiums direct to the provider.

The monthly lease payments are then debited to the director’s loan account (DLA). Do these payments reduce the director’s company car benefits in kind (BIK)?

The only payments that can reduce the company car BIK are capital contributions and payments for private use.

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