Today, the business is developing more rapidly. Time determines money and vice versa. The more mobile the company’s employees, the stronger its market position. Therefore, the car has become not only a means of transportation, but also a way to profit and achieve success.
Currently, the use of a personal car for official purposes is used in many enterprises where the personnel have work of a traveling nature. Managers also use private vehicles to resolve various work issues on the road.
Ways of registration of relations with the employee on the use of transport
This article will figure out how to document this. Relationships are drawn up with an employee who uses his car to fulfill official duties in various ways.
Firstly, you can specify the clause on the exploitation of property in the employment contract and pay compensation as provided by law.
Secondly, you can also draw up and sign an agreement with the employee (which is called civil law) indicating the lease of your own transport with the provision of management assistance and technical use. At the same time, observing the norms for using a personal car for official purposes.
Advantages and disadvantages of each option
Each option has advantages and disadvantages. Let's consider them in more detail.
The difference with other means of acquiring vehicles for use is that in this case, the car is operated both in workers and in their own personal affairs. Accordingly, payments for the use of an employee’s car may be less than a rental, which is implied in accordance with a car rental agreement with a driver. But, as practice shows, the operation of your own car is determined by the scope of its use: usually it is business trips, where it is easier to get to your own car, or these are places where public or other transport does not go. Various business meetings often involve the use of a car. Where else might personal transportation be needed? For example, an employee’s activity involves constant movement around the city, from one client to another. Doing this on foot will not work, since a lot of time is spent. It is beneficial for a company to hire a person with a machine. He will have time to go round customers, and the company will compensate him for expenses.
Also, the operation of one's own car within the framework of an employment relationship can be regarded as the fulfillment by an employee of his official duties. And compensation for the use of a personal car for official purposes, which is due to an employee, should not be taxed. But these compensations, as a rule, have their own nuances in labor legislation. Civil law provides the parties to a relationship a choice. This allows you to consider the various options and amounts of payment that are associated with the operation of the car, so that all interested participants are satisfied. But this suggests that tax duties and contributions will be subtracted from the amount of compensation.
Personal use of a company car
It doesn’t matter which method is chosen, the company is better off if the employee travels on his own transport.The company will not need to bear the burden of large expenditures on the purchase or rental of a car, respectively, the costs of this period will not increase. Expenditures on maintenance and use will decrease: partly the company pays, partly the employee (transport owner), who uses it for his own needs. In addition to reducing waste, the company reduces document and labor costs for accounting for the use of the car.
The relationship between the employee and the employer is regulated by the rules of labor law, which provide for compensation payments for vehicle depreciation, its depreciation and embezzlement, which are associated with the employee operating his own car for official needs. Therefore, an order must be issued for the use of a company car for personal purposes.
As already noted, the rules for the return of costs to the employee and the amount of compensation are provided for by labor legislation, and in the absence of such rules are determined by agreement of the parties to the labor contract, which is concluded in writing. Then the question arises before the accountant: how to draw up an act on the operation of own transport by an employee correctly?
Payment for the use of a personal car for official purposes
As an option, the existing regulatory documentation for compensation payments for the operation of your own car is taken as the basis, for example, approved by the Government of the Russian Federation (it refers only to payment standards, but not to their size):
- The staff of the internal affairs bodies.
- Employees of organizations and bodies of the penitentiary systems, federal fire services of the State fire services, drug control authorities and customs authorities.
- Federal government employee.
Despite the fact that the documentation is addressed to various subcategories of persons, the principles of appointments and compensation payments are the same:
- Compensation is paid to workers who have work of a traveling nature.
- The basis for the employee to use their own car for official needs is the order of management.
- For employees who use personal vehicles for official needs by proxy of its owner, compensation payments are accrued in the same manner.
- To pay compensation for the use of a personal car for official purposes, an employee must submit an application stating which labor obligations have been fulfilled and for how long their own car has been used.
If everything is correctly formalized, then there will be no problems with receiving a compensation payment. Let's see what package of documents the employee should collect.
Employee-provided documentation
With a statement, the employee provides other necessary documentation:
- A copy of the certificate of registration of a personal car or a passport for a vehicle (PTS), a power of attorney that provides the right to drive a car.
- The waybill, the necessary details and the schedule for entering which are adopted by the authorities that implement the state policy and regulatory regulation in the field of transport.
- Documentation confirming the waste of using your own car for official needs (fuel checks, maintenance certificates).
The accountant must also fill out a waybill, as this is the primary document confirming the use of personal transport by an employee for official purposes. The form of this sheet was approved by the Resolution of the State Statistics Committee of the Russian Federation. Other organizations can use a waybill of their form or another document that will confirm the cost of combustible materials. All details prescribed by law must be indicated:
- document's name;
- date of issue;
- organization of the document;
- business operation and its content;
- units;
- positions of responsible persons;
- signatures of the specified persons.
In addition, you need to specify the specific location of the vehicle. Otherwise, it may be difficult to pay compensation. When a uniform form is applied, there are fewer conflicts.
All provided documentation should confirm operation for the needs of the enterprise, and not for the needs of the employee. But it should be borne in mind that the decision to pay for the use of a personal car for official purposes is made by the head in a certain period of time, while taking into account:
- The need to operate the car to fulfill labor obligations that are associated with frequent business trips.
- Vehicle operating time for official needs.
- The amount of funds that have been allocated to the company for the work.
Enterprise cost recovery
Using a personal car for business purposes incurs various costs, but not all of them will be reimbursed by the enterprise. According to the practice of using our own transport, embezzlement between the employee and the enterprise should be distributed as follows: the employee is supposed to return the embezzlement for the purchase of fuel and lubricants upon the fact confirmed by the documentation (checks, receipts, etc.). Compensation is paid separately with the compensation of the listed embezzlement.
Compensation is not paid to an employee in the following situations:
- during vacation;
- during a business trip;
- during a period of temporary disability, which is confirmed by the sick leave;
- in other cases when the car does not operate.
When operating your own vehicle (after filling out the consent to use your personal car for official purposes according to the model), the employee will not receive a separate payment for assistance in its management and maintenance. The very operation of their own vehicle is carried out within the limits of labor duties, for which the employee is entitled to a remuneration, which is the salary. Calculation of compensation payments for the use of a car is analogous to a rental payment, which includes depreciation of a vehicle.
When a vehicle rental agreement provides for rent, it is subject to personal income tax as a general rule. Personal income tax is not charged only on compensation for the operation of an employee’s personal car and the expenses that he incurred. This will be described in more detail below.
Reflection of expenses in accounting
Accounting for compensation payments for the operation of one's own vehicle for official needs and the return of embezzlement associated with the use of a personal vehicle are kept in account 302 12 “Other payments”.
In accounting, enterprises indicate only two postings when using a personal car for official purposes:
- Crediting of the compensation amount and reimbursement of expenses upon the fact.
- Payment of compensation to the employee in the prescribed amount.
In the accounting department of a budgetary or autonomous enterprise of physical education and sports, such records of accounting for the contents of the operation are made:
- Reflection of expenses for payment of compensation.
- The issuance of compensation from the cash desk of the institution.
- There was a transfer to a bank card to an employee.
But if the use of an employee’s personal car for official purposes is carried out under a contract of employment, then use account 302 24 “Rent and Settlements on It”. In the column “Credit” on this account the crediting of the rental fee is indicated, and in the column “Debit” - its transfer to the employee’s account or issuance from the cash desk of the enterprise.
In the accounting department of a budgetary or autonomous enterprise of physical education and sports, such records of accounting for the contents of the operation are made:
- Car rental charge.
- The rent was paid from the cash desk of the institution.
- Transferred to a bank card to an employee.
But it is worth noting that there are no records of tax liabilities for simplified transactions. It should be taxed and the use of a personal car for official purposes.
In what situations are personal income tax levied on compensation?
Now let's talk about taxes. All profits made by individuals, including employees of enterprises, are taxed on personal income. All types of compensation provided by labor law are exempted from taxation.
That is, the non-taxable amount is that indicated in the contract for the use of a personal car for official purposes. In this case, there must be documentation confirming the ownership of the vehicle in use by the taxpayer. Also, with the help of documents, it will be necessary to confirm the actual operation of the vehicle for the interests of the enterprise and the amount of waste associated with it.
But neither the labor nor tax laws contain:
- A list of documentation that can confirm the operation of your own vehicle.
- Provisions that prohibit the head of the enterprise to reimburse employees for embezzlement incurred in the performance of labor obligations.
It follows that the head of the enterprise himself can create rules for determining tax-free compensation payments for employees using a personal car for official purposes, providing for their own size.
If employees use personal cars for work, then compensation for this is not taxed, but under the following conditions:
- the use of transport and compensation are fixed in writing (a separate agreement is being drawn up or this is provided for by an employment contract);
- employees submitted documents for the car (registration certificate, title);
- the organization draws up route sheets.
Insurance premiums
When calculating insurance premiums, it must be remembered that they are levied on payments and awards that are accrued to an individual within the framework of an employment relationship and civil law contract. The accrual of compensation payments for using the vehicle to work within the amount established by the contract between the employer and the employee is not remuneration, remuneration for the fulfillment of labor or other obligations, material benefit. Accordingly, such compensation is not subject to an insurance premium.
If an employee of the organization uses an official car, while there are no waybills and other supporting documents, then such an individual will have an economic benefit in the amount in which it is estimated. This type of income is subject to personal income tax when using a company car for personal purposes.
In addition to the explanations of officials, it becomes clear that the provision of a car by proxy does not have a transfer of ownership, and this car cannot be considered the property of a trustee. In accordance with Article 185 of the Civil Code of the Russian Federation, a power of attorney is a written assignment that is issued by one person to another for representation before a third party.
Compensation payment under an employment contract for the operation of one's own vehicle, which is provided to the employee for management by proxy, is also not taxed. It should be remembered that the driver is responsible for using the company car for personal purposes.
Settlements under a car rental contract with a driver cannot be taken as a compensation payment to an employee who has been granted a power of attorney to drive a vehicle.Thus, the subject for insurance premiums for extrabudgetary funds is absent.
When is a waybill needed?
Many accountants ask the question: “Is a waybill required for compensation payments for the operation of my own vehicle?”. At the same time, everyone knows that such a sheet forces you to fill out the Federal Law “The Charter of Road Transport and Urban Land Electric Transport”, which prohibits the transport of baggage, cargo, passengers by public transport (buses, trolleybuses, trams), cars and trucks without a proper waybill transport, as in the order to use a company car for personal purposes. The waybill is included in the list of necessary documents for the operation of a car owned by a legal entity.
What does transport law tell us about this? Institutions and enterprises that use vehicles to transport passengers and goods will not do without a waybill. If the car is operated by a person for their own needs, then there is no need to draw up such a sheet, as it is assumed in the above normative acts for legal entities and entrepreneurs using vehicles.
Waybill when using an employee’s personal car
A similar opinion is formed regarding the use by an employee of a personal car for official purposes. But here the need for its execution is dictated not by the rules of transport legislation, but by the norms of labor and tax legislation, which oblige to confirm the official operation of the employee’s own vehicle. To confirm the waste on the purchase of fuels and lubricants for the needs of general production work, we need a correctly prepared waybill, which indicates the actual fuel consumption. Information that does not allow checking the costs of fuels and lubricants as general production can play into the hands of controllers.
In summarizing, the following should be noted. In order for the payments for the operation of the employee’s own vehicle to be compensatory, it is necessary to observe the procedure for using a personal car for official purposes:
- The operation of the car is related to the fulfillment of labor obligations.
- Compensation payments shall be issued on the basis of an order from the employer. The amount of reimbursement of the indicated costs is obliged to meet economically justified expenses.
If these rules are not complied with, it is worth signing an agreement or an agreement with the employee on the use of a personal car for official purposes with the driver and taking into account all taxes and fees.