Personal Use of a Business Vehicle

 

The Canada Revenue Agency (CRA) is always assessing whether a vehicle is being used for personal or business purposes. If the CRA believes that a vehicle is being used for personal reasons, they may tax it as a corporate benefit.

 

When Can You Use The Vehicle?

 

There are a few exceptions where using a business vehicle for personal reasons is allowed:

 

– If you are the owner of the business, you can expense the cost of using the vehicle for business purposes.

– If you are an employee of the business, you can use the vehicle for commuting to and from work.

– If you are an employee of the business and you use the vehicle for business purposes, you can expense the cost of using the vehicle.

 

If you are using the vehicle for any other reason, the CRA may deem it as a corporate benefit and tax it accordingly. It is important to keep track of your business use of the vehicle in order to avoid any penalties from the CRA.

 

CRA Looks For Mileage Problems

 

The CRA is always looking for businesses that are not reporting their mileage accurately. If the CRA suspects that a business is not reporting their mileage accurately, they may audit the business and impose penalties if they find that the business owes corporate taxes.

 

If you are using a vehicle for business purposes, it is important to keep accurate records of your mileage. This will help you avoid any problems with the CRA.

 

Tips For Keeping Accurate Mileage Records

 

Here are a few tips for keeping accurate mileage records:

 

– Keep a logbook in the vehicle that records the date, time, and purpose of every trip.

– Keep track of all business-related receipts, including fuel, maintenance, and repairs.

– If you use your personal vehicle for business purposes, make sure to keep track of the mileage so you can claim it as a business expense.

 

Following these tips will help you avoid any problems with the CRA and ensure that you are accurately reporting your business mileage.

 

If you have any questions about whether you can use a business vehicle for personal reasons, you should speak to a tax professional at BBS Accounting CPA.