With the income tax deadline fast approaching, many of you may be giving some extra thought to your taxes and wondering whether or not you are claiming all possible deductions which you may be entitled to. One deduction which is often overlooked is the cost to an employee of providing their car and incurring running expenses in respect of their employment. Where an employee provides their private car for the purpose of their employment, costs can be relieved by the employer in one of three ways: 1. The employer can reimburse all vouched receipts in respect of actual expenses incurred. This method of reimbursement is tax free. 2. Where the employee keeps a detailed log of all mileage (both business and personal) incurred during the year, then an amount equal to the number of business kilometres travelled at the prevailing civil service mileage rate may be reimbursed by the employer. This method of reimbursement is also tax free. 3. The employer may make round sum payments to employees required to use their personal car for business use. In this case the gross payment will be subject to tax. Where the employee does not receive reimbursement in respect of these costs then they may make a claim to Revenue for an expenses deduction. Claims are not just limited to running expenses of the car. In certain circumstances, an employee may also claim an annual portion of the original market value of the car subject to certain limits. To complete this claim form, the employee will require the following information: • Date of purchase of car. • Purchase price. • Whether new/second-hand. • Date from which car was used for business purposes. • Mileage and percentage of business to private use. • Running Costs - Repairs, Service, Tax and Insurance. • Any reimbursement of running cost made by the employer.