Imagine that your company has kindly provided a very expensive personalised number plate along with your brand new company car. The possible tax treatment of the number plate is unlikely to be the first thing on your mind…. and yet…..The tax treatment of the company car itself is well known both for the employer and the employee and is not the subject of further consideration in this article. But what of the number plate itself?
As far as the individual is concerned there will be no additional tax charge just because the company car comes with a personalised plate. The normal charge under the company car rules is deemed to cover everything except a chauffeur.
For the company itself will there be any tax deduction for the cost of the plate? Where the company has paid a significant sum of money for a plate it is buying the number itself rather than a piece of metal or plastic and this counts as an ‘intangible’ asset. Capital allowances are not given on intangible assets. However, a new regime introduced in April 2002 may help. The new rules may allow a tax deduction (albeit spread over a number of years which may be as many as 25) for the cost of the plate but only where it was acquired after 31 March 2002. To get a tax deduction the company will need to show that the plate is held for a business or other commercial purpose. This is likely to be easier where the number plate bears the initials of the company itself but may be more difficult if it is the initials of, say, an individual director. The new rules only apply to companies so if you run your business as a sole trader or partnership then no tax relief will be available.