Are you a car expert looking to turn your passion into a side job? The idea of using a company car for private use might sound appealing. But is it even allowed? This article clarifies the most important questions surrounding the topic of “company cars in side businesses.”
Company Car for Side Hustle: What Does It Actually Mean?
A company car in a side business means that you use a vehicle owned by your business for private purposes as well. While it sounds simple at first, there are several legal and tax aspects to consider. The rules for using a company car in a side business differ from those for employees in an employment relationship.
Which Regulations Apply to Car Experts with a Side Business?
Unlike a main occupation, a side business is not your primary source of income. This also affects the use of a company car.
- 1% Rule: The so-called 1% rule, which is often used for employees to tax the benefit in kind, does not apply to you.
- Logbook: To correctly deduct the private use of your company car in your side business, you must keep a detailed logbook. You record every trip here – both business and private.
- Proof Obligation: In the event of a tax audit, you must be able to prove the business use of your vehicle.
Is a Company Car for a Side Business Even Worth It?
Whether a company car in a side business is worthwhile for you depends on various factors:
- Mileage: Do you mainly drive for business or do private trips predominate?
- Financial Situation: Can you afford to purchase and maintain a company car?
- Tax Advantages: Talk to your tax advisor to clarify the tax advantages and disadvantages.
What Should Car Experts Consider When Purchasing a Company Car?
- Vehicle Type: Choose a vehicle that meets your professional requirements.
- Costs: Compare purchase costs, insurance, and maintenance.
- Tax Deductibility: Clarify with your tax advisor which costs you can deduct.
Conclusion: Decide with Good Information
Using a company car in a side business can offer many advantages, but it also involves some challenges. Get well informed about the legal and tax framework before making a decision.
Do you have any further questions about company cars in side businesses? Our car experts are happy to help you with advice and support! Contact us now via our website.
