Company car opt out

keef30

I have a company car at the moment which i pay quite a bit of tax on. As i live in rural area i dont not pay for my own private mileage (i do more than 3000 private miles each year). Our firm is now beginning to tighten down more on private mileage though, especially those who do not pay for their there own private mileage...

I suspect i will be worse off, and would prefer to opt out of using my company car for private use altogether, pay less tax and get a pay increase - however my firm are saying the HMRC do not allow this ?? is this true ?

BoGoF

The legislation states if a car is made available for private use then a benefit arises so in that sense you cannot opt out if your employer makes it available. Your employer would need to forbid private use and take steps to ensure it was not used for private use for a car benefit charge not to arise. If they are not prepared to change their policy and you don't want to pay tax hand the car back.

Having said that I am not sure if you are on about the car benefit or the fuel benefit charge?

keef30

BoGoF wrote: »

Having said that I am not sure if you are on about the car benefit or the fuel benefit charge?

Both really - i pay tax on the car, and my private fuel... I could just pay for the car benifit, and re-imburse the company for private fuel.

I want to opt out completely - only use my car for company use. Van users are allowed to do this - they have trackers fitted etc. But they say car users cannot..

It could be somthing to do with using the car to get to work (commute). But seeing as i work from home, travelling to different job loctions each day - i would'nt have thought it applied... my use would be no different to a van user..

getmore4less

If they wont go down the car allowance route then they could drop the fuel card and pay business miles on the company car.

That still leaves the lease costs for any high private mileage.

Is there a base close enough to commute too in your own car and then pick up the company provided car.


How are they clamping down on private use

5k is only 100 private a week that is easy to build up.

vax2002

The majority of lease vehicles have trackers fitted, they just dont tell you !

BoGoF

keef30 wrote: »

Both really - i pay tax on the car, and my private fuel... I could just pay for the car benifit, and re-imburse the company for private fuel.

I want to opt out completely - only use my car for company use. Van users are allowed to do this - they have trackers fitted etc. But they say car users cannot..

It could be somthing to do with using the car to get to work (commute). But seeing as i work from home, travelling to different job loctions each day - i would'nt have thought it applied... my use would be no different to a van user..

Basically the car and van benefit legislation is different. "Incidental" private use of a van can be disregarded for benefit purposes but the car benefit legislation is quite specific....if the car is made available for private use then a car benefit charge arises whether the private mileage is 0 or 10,000. Fair it may not be, but thems the rules. If you don't want to pay tax then give it back and use your own vehicle.

keef30

BoGoF wrote: »

Basically the car and van benefit legislation is different. "Incidental" private use of a van can be disregarded for benefit purposes but the car benefit legislation is quite specific....if the car is made available for private use then a car benefit charge arises whether the private mileage is 0 or 10,000. Fair it may not be, but thems the rules. If you don't want to pay tax then give it back and use your own vehicle.

This indicates otherwise...

Google EIM23405.htm

(i'm not allowed to post links...)

AIFOP

keef30,

Hopefully, I have understood your first post.....however,

I would suggest keeping the company car for the moment and concentrate on opting out of the 'free' personal fuel.

Making some assumptions:

Fuel benefit = £18,800 x 20% BIK x 20% tax = Tax of £752 per annum.

3,000 personal miles per year at say a cost of 12p per mile = £360 per year for private fuel.

Therefore, £392 saving. (who says tax avoidance is for the rich!)

Claim back business mileage in accordance with HMRC advisory rates (This is a tax free and will only just cover fuel cost).

Also, you could ask your employer to increase your salary in recognition of you paying for your own private fuel.

BoGoF

keef30 wrote: »

This indicates otherwise...

Google EIM23405.htm

(i'm not allowed to post links...)

That link merely confirms what I said in post 2 in that your employer needs to forbid private use. An extract from it


The key principles that emerge from the case are:

• there must be an express ban on private use, that is the ban must be explicitly stated, so that an implied ban is insufficient to meet the test
• there must be a legally enforceable ban on private use.

Provided these factors are present, and depending on the context in which it is delivered, a verbal prohibition may count as an effective and meaningful ban on private use.

I can't see how this helps you if you are employer allows private use.

bobthedambuilder

Can you ask for a van to be provided instead of a car?

keef30

BoGoF wrote: »

That link merely confirms what I said in post 2 in that your employer needs to forbid private use. An extract from it




The key principles that emerge from the case are:

• there must be an express ban on private use, that is the ban must be explicitly stated, so that an implied ban is insufficient to meet the test
• there must be a legally enforceable ban on private use.

Provided these factors are present, and depending on the context in which it is delivered, a verbal prohibition may count as an effective and meaningful ban on private use.

I can't see how this helps you if you are employer allows private use.

My point is i would like my employer to no longer allow me to use the car for private use, so i pay no tax on the car at all.

They are saying they cannot because the Tax rules do not allow it - im saying this is wrong, its just the employers decision at the moment - and there is no reason why they could not change it (they just need to enforce the ban..as they do with vans).