Work Car

churchrat

morning all
My oh works a long way from home, goes on Sunday night, comes back on Friday.
Until a couple of months ago we used our own car for these journeys, but it was very old and as we only had one car it became difficult to keep this up. We suggested that the company either pay for train fare or supply a car. They have agreed to supply a car (my oh does the running about for others on his site), and have done so now for about 8 weeks--BUT--this car is hired monthly on the company credit card and does not go through as part of my oh's wage as a company car. We have use of the car at weekends.

My oh is not paying any tax on this car--it has just occured to me that perhaps he should be??

should we do anything about this? its very nice having the car but we don't want to be landed with a big bill or break any rules.
thanks for any help:rolleyes:

Bean_Counter

It would appear on the face of it that it is clear cut that this is a company car as should be taxed as such. The company should issue a P46(CAR) form to HMRC to notify them and oh's tax code would be amended accordingly to collect the tax.

The amount of tax is based on the P11D value of the car and the CO2 emssions.

churchrat

thanks for that. should we notify the employer?

Bean_Counter

It might not hurt to remind them as then you spread the tax bill over a greater number of wage payments. You could inform HMRC yourself but you may not have the correct P11D figure and CO2 emissions. Best let the employer do it.

Bobl

The Car is hired on short term hire contracts only, therefore it is not a company car and will not attract tax as a benefit, also he may not be covered for private use so may not have insurance at the weekends. Check with the hire company to see what the terms of the lease is.

Bean_Counter

Bobl wrote: »

The Car is hired on short term hire contracts only, therefore it is not a company car and will not attract tax as a benefit, also he may not be covered for private use so may not have insurance at the weekends. Check with the hire company to see what the terms of the lease is.

I wasn't aware that there was an exemption of the company car rules for short term hires (excluding 'pool cars' which this obviously is not.)

I would have thought that this situation where is car is made available for private use, especially for 8 weeks and counting, made this a company car and taxable as such. Link. Of course the charge may be pro-rated depending on the length of the hire.

Valid point on the insurance and might be worth checking who is insured / allowed to drive. I know in our company we need to show a valid driving licence before a spouse / partner is allowed to drive a company vehicle.

churchrat

hello
yes, the lease is short term only and renewed weekly. My oh renews the lease on his company cc, which we do not have any dealings with (other than to spend the money).
My oh is the only one able to drive the car and it is available for personal use--we have checked the insurance.
many thanks

Bobl

Given your last post, you do not have to report this to the tax office. This is a legitimate business expense.

churchrat

many thanks, a big relief

Any

Bobl wrote: »

Given your last post, you do not have to report this to the tax office. This is a legitimate business expense.

Complete and utter rubbish. It dosn't matter how the car is funded or leased, as long as it is provided by the employer (which it is-they pay for it) and it stays over night at your house (pool car stays at the premises) it is a company car and therefore tax arises.

I suggest you call the HMRC and clarify this and they will advise you over the phone what to do next.

That way you are completely sure you are complyingwith the rules and paying appropriate tax.

BTW how big is this company and do other employees have company cars? Some companies do not deal with P46 forms during the year, they only deal with the P11Ds at the end of the year and then indeed you will land with a tax bill. But if you ask the company for P11D and CO2 (average, I suppose the car is generally of the same group of cars) you will pay at least some tax now and at the end of the year the final figure will be calculated according to the actual cars you had over the year.

I used to be Fleet support executive (until last year) and it was normal then some of our employees had hire cars only renewed every 28 days (due to high mileage), quite often given different car every 28 days and there was no point of constant reporting of changes to HMRC. The changes in tax code would not go through payroll until like month or two later when they would already have different car anyway... So we reported average and it was only at the end of the year when we reported full list.

it was really only matter of tens of £ if at all different from the tax paid..

Any

Cut from the HMRC website:

There is a tax charge where, because of their employment, a car is made available to and is available for private use by a director or an employee earning £8,500 a year or more, or to a member of their family or household (a ‘company car’).
There is a further tax charge if free or subsidised fuel is provided for private use in a company car.

A company car is a car which you do not own

but can use by reason of your employment.


Link http://www.hmrc.gov.uk/cars/index.htm

Note there is a way to avoid pay for tax on fuel (if you repay all your private mileage to an employer)

There is no way to avoid paying tax on a company car (different rules for van) unless the car is a pool car (ie-car stays at the company premises over night)