News
About Us
Contact Us

Company Cars Reading Answers

Bhaskar Das

Mar 6, 2025

Company Cars Reading Answers is an academic reading answers topic. Company Cars Reading Answers has a total of 7 IELTS questions in total. In the question set you have to state whether the statements agree with the views of the writer of the text by choosing Yes, No, or Not given.

The IELTS Reading section is an essential part of the test that evaluates a candidate's comprehension and analysis of various passage types. You will work through a number of IELTS reading practice problems in this section that resemble actual test situations. These questions are designed to help you improve your ability to recognize essential concepts, extract particular facts, and make inferences. Practicing these IELTS reading problems can help you get comfortable with the structure and increase your confidence for the exam, regardless of whether you are studying for the Academic or General Training module.

Check: Get 10 Free Sample Papers
Check: Register for IELTS Coaching - Join for Free Trial Class Now

Section 1

COMPANY CARS

A car purchased for use in a business has certain tax advantages for the owner, whether that owner is the business or an employee. However, there are tax and other factors to consider in the decision to allow an employee to have a company car. The biggest monetary benefit to the company from owning a business car is the cost savings from tax deductions. This deduction comes in two parts: the deduction for ownership of the car, and deductions for costs of driving the car for business purposes. For the business owner, the cost of the car as a business asset and the costs for business use of the car are both fully deductible from business taxes. For the employee, the cost of the car as an asset is not deductible (even for interest expenses on borrowing money to buy the car).

Specific Benefits of Business Ownership of a Company Car

- The company can deduct depreciation expenses at the rate in effect at the time the asset is put into service.

- The company can also deduct general auto expenses for business use of the vehicle, like maintenance, gasoline, and tyres.

- If the business owns the car, personal use of the car by the employee must be documented and the company must report personal use as taxable compensation.

- Interest on a car loan is deductible to a business as an ordinary and necessary business expense.

- Insurance for a company-owned car will probably be cheaper than for an employee-owned vehicle, since businesses can get leased-car and multiple-car rates and other discounts.

- If a company-owned car is involved in an accident, the driver's personal insurance rates and liability are minimised Many of the same issues are relevant if a business decides to lease a car for employee business use. Remember, however, that if you lease a car for an employee, you don't have much control over how much mileage the employee puts on that car. Many car lease terms have mileage restrictions and you may not be able to control personal use and keep costs

down. Every situation is different, but it's nearly always the case that leased cars should be privileges for owners and executives; it's better to buy a car if an employee will be driving it.

Many expenses related to company cars can be deducted from corporation tax, but to be able to deduct these expenses, businesses must be able to provide proof. Business car expenses, like other business expenses, must be

- complete, showing all information including the date, location, mileage, and purpose.

- accurate, meaning you should have backups for individual expenses.

- timely, at the time of the expense, not created later.

Your employees must also be aware that they must separate business and personal use of the company car, whether it is their personal car or a business-owned car. Personal expenses are never deductible.

After you remove the taxation implication, it's difficult to put monetary costs on the financial value of a company car programme. The visibility, control and ability to deliver that such schemes provide can be invaluable. Aside from the significant benefits for recruitment and retention, the value of a company car programme to an organisation is only truly

understood when it is not there or something goes wrong.

Questions 15-21

Do the following statements agree with the views of the writer of the text?

In boxes 15-21 on your answer sheet write:

YES - if the statement agrees with the writer's views

NO - if the statement doesn't agree the writer's views

NOT GIVEN - if it is impossible to say what the writer thinks about this

15. The most significant financial advantage of company cars for companies is the increase

in sales generation.

Answer: NO

Supporting statement: The biggest monetary benefit to the company from owning a business car is the cost savings from tax deductions.

Keywords: monetary benefit, company

Keyword Location: Para 1, Line 3

Explanation:According to the passage if a company owns a company car it will get a monetary benefit as cost saving from tax deduction

16. If the employee actually buys the car, he or she can set off the interest payments of a car

loan against tax.

Answer: NO

Supporting statement: For the employee, the cost of the car as an asset is not deductible (even for interest expenses on borrowing money to buy the car).

Keywords: employee, interest

Keyword Location: Para 1, Line 8

Explanation: The passage states that if an employee buys the car he cannot set off the interest payable against the loan taken to buy the car.

17. Companies must declare that an employee uses his/her company car for the employee's

own purposes so that this benefit can be taxed.

Answer: YES

Supporting statement: If the business owns the car, personal use of the car by the employee must be documented and the company must report personal use as taxable compensation.

Keywords: documented, taxable

Keyword Location: Para If the business owns , Line 3

Explanation: According to the passage, if an employee uses the car for their personal use it must be documented and reported by the business owning the car for the purpose of this benefit to be taxed.

18. Car insurance for companies is often cheaper.

Answer: YES

Supporting statement: Insurance for a company-owned car will probably be cheaper than for an employee-owned

Keywords: Insurance, cheaper

Keyword Location: Para Insurance for a company-owned, Line 5

Explanation: The passage highlights that the insurance for a company-owned car is cheaper than an employee-owned car.

19. Cars should usually be leased only as a perk for top management.

Answer: YES

Supporting statement: that leased cars should be privilege for owners and executives

Keywords: leased cars, privileges

Keyword Location: Para If a company-owned, Line 6

Explanation: According to the passage, cars should only be leased for the top management privileges.

20. Receipts for claiming expenses back against tax have to be kept for 7 years after the

relevant tax year.

Answer: NOT GIVEN

Explanation: The passage contains no information regarding the statement asked above.

21. The inclusion of a company car in a contract can help companies secure the best staff.

Answer: YES

Supporting statement: Aside from the significant benefits for recruitment and retention

Keywords: significant benefits, recruitment

Keyword Location: Para After you remove, Line 3

Explanation: According to the text, if a car is included in the contract of an employee it benefits the company in recruiting the best staff.

Read More IELTS Reading Related Samples

*The article might have information for the previous academic years, please refer the official website of the exam.

Comments

No comments to show
Practice Paper
Also Check
IELTS Overview
IELTS IELTS Exam Dates
IELTS IELTS Results
IELTS IELTS Writing Task 2
IELTS IELTS Reading
IELTS IELTS Speaking Topics
IELTS IELTS Preparation
IELTS IELTS Listening
IELTS IELTS Exam Pattern
IELTS IELTS Practice Papers
IELTS IELTS Coaching in India
IELTS IELTS Cutoff
IELTS News