Tax treatment of car washing expenses

We are in the midst of autumn, and the roads are getting dirty, so naturally many of you will be washing your cars more frequently. Below we have written a summary of the tax issues to consider when it comes to car washing expenses.

For Employers

If you cover the cost of a car wash for one of your company cars, no tax liability will arise on your employee. This treatment applies; however, the cost is borne by you, for example, if it is paid directly by your company or reimbursed to your employee who paid for the car wash personally. HMRC accept that these costs are in connection with the company car, so the reimbursement is exempt from tax.

For Employees

If you pay for a car wash personally but are not reimbursed by your employer, you cannot claim a tax deduction for the unreimbursed expenditure. Such expenses are not incurred in the performance of your employment duties. Therefore without reimbursement, you cannot claim tax relief for personal expenses.

If you use your own car for business purposes you cannot claim a tax deduction for car washing costs. Any reimbursement of such costs by your employer would be taxable.

If you would like to speak to a trusted member of our tax team regarding anything highlighted in this blog, do not hesitate to contact us.

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