'Business Car' Car Insurance

doningtonphil

Hello, I initially put this on the small business thread but was advised better suited to here.


Hello, we are a small business that provides 1x leased car for our Sales manager.


We started leasing in July last year. I can't remember the reason but our company took out an Insurance Policy through a broker a Royal & Sun Alliance BUSINESS CAR policy. The latest renewal is for £900!!!!!.


The company wishes to pay for the Insurance rather than the individual.


I have just done a search on "Compare The Market" and entered all the details that it was a Company Lease Vehicle and it will be used for business by any of the named drivers and it is offering regular policies with prices around the 300-400 mark.


MUST we have a 'Business Car' policy (is it something to do with the business paying for it) or can we just use one of these regular policies?


I hope you can help

Quentin

If you mean can you put these policies through your books for setting them against tax then yes.

InsideInsurance

doningtonphil wrote: »

I have just done a search on "Compare The Market" and entered all the details that it was a Company Lease Vehicle and it will be used for business by any of the named drivers and it is offering regular policies with prices around the 300-400 mark.

Who did you put down as the policyholder? Who did you put down as the owner/registered keeper?

Presumably you are a Ltd and so the policy should be in the name of the Ltd.

You could speak to your accountant/hr advisor to see if they can get their own insurance on the car and the company reimburse them as a business expense and if there is any additional BIK or accountancy issues with this set up but the person would have to correctly declare the owner/ keeper which as at least the owner isnt them may impact the premiums charged.

doningtonphil

quentin


yes, I do want to put it through the accounts although the tax benefit would be minimal as there does not appear to be VAT on insurance premiums.


insideinsurance


we are a LTD company. Our current 'Business Car Policy' was paid for by the company but all correspondence goes to the employees home address, although the policy is in the name of the company. The owner is the Lease company and the registered keeper is our employee


Is a 'business' car insurance policy the same as a 'business' bank account ie the suppliers would like you to think you MUST have a 'business' product with all the extra charges it entails but a standard product is perfectly acceptable?

Quentin

doningtonphil wrote: »

quentin


yes, I do want to put it through the accounts although the tax benefit would be minimal as there does not appear to be VAT on insurance premiums.

Yes no vat involved.

But you will get full tax relief on the £300/400 so hardly a minimal amount ( depending on your profits of course)

rs65

Whose name have you done the quotes in?

InsideInsurance

doningtonphil wrote: »

Is a 'business' car insurance policy the same as a 'business' bank account ie the suppliers would like you to think you MUST have a 'business' product with all the extra charges it entails but a standard product is perfectly acceptable?

For Banking and Insurance the companies that create and sell the products are for profit organisations that are free to make up the rules of the product as they see fit as long as they are within the constraints of the law.

Differentiating between businesses and private individuals is not outlawed and indeed the law itself differentiates between them, particularly when you are comparing a person to a Ltd

Business car insurance does have options available to it that arent (readily) available to the private sector but in this case it doesnt appear you are wanting to use any of them (just like most sole traders arent interested in the features of business banking)

To the best of my knowledge there is nothing to stop the employee insuring the vehicle themselves as long as they correctly declare the owner/ keeper etc. I've never specifically looked in the terms to find something that'd stop it but cannot think of anything off the top of my head.

The two issues I potentially see with the idea are not from an insurance perspective but a HR/Accounting/ Taxation issue as technically this is his insurance not the company car's and as such there may be tax due on this payable by him as an additional benefit of employment and secondly the Lease may state the Ltd must insure the vehicle rather than a more general "the car must be insured" in which case a personal policy in the name of the driver wouldnt meet this condition of the lease.

dacouch

Have you selected the correct business use as depending on your business and / or the occupation of the employee you may need additional business cover especially if the named drivers you refer to are your employees.

Whats your trade and whats the employees occupation