Company car - courtesy car tax reduction

lazer-zxr

Hi all,

I usually use a company car, 2.0 TDI Passat list price £32k 190g/cm co2.

For one reason or another, I've been using a little 1.0L courtesy car for a total of 5 weeks this year.

Am I able to reduce my BIK?
would I do this through my employer, or through HMRC?
And am I likely to get much of a reduction?

BeenThroughItAll

lazer-zxr wrote: »

Hi all,

I usually use a company car, 2.0 TDI Passat list price £32k 190g/cm co2.

For one reason or another, I've been using a little 1.0L courtesy car for a total of 5 weeks this year.

Am I able to reduce my BIK?
would I do this through my employer, or through HMRC?
And am I likely to get much of a reduction?

Would it really be worth the paperwork/hassle/conversation with HMRC?

lazer-zxr

Considering my current situation:
Passat monthly tax £158
Corsa 1.0L monthly tax £67

£91 is a lot of money to me at the moment.

Minrich

What is the one reason or another ? What has happened to the Passat ? Is it still your car ?

Just because you are using a Corsa doesn't necessarily mean you are entitled to any refund . Otherwise people would be claiming for not using their company car when on holidays abroad etc .

lazer-zxr

The Passat spent two weeks in a VW dealer as the sunroof leaked. It went to the dealer for an additional week for servicing and suspension bushing replacements etc. It is now back in the dealer (3 weeks and counting) having some bodywork repairs carried out.

The Passat remains my company car after the repair has been carried out.
It's not my choice to be without the car (as would be the case during a holiday abroad).
The Passat has effectively been unavailable for me to use, with the car that is available being one that would incur less tax.

jimjames

lazer-zxr wrote: »

Hi all,

I usually use a company car, 2.0 TDI Passat list price £32k 190g/cm co2.

For one reason or another, I've been using a little 1.0L courtesy car for a total of 5 weeks this year.

Am I able to reduce my BIK?
would I do this through my employer, or through HMRC?
And am I likely to get much of a reduction?

It seems unlikely that you would be able to do that. Presumably your employer has not bought this 1L car so can't declare to HMRC that they paid a certain amount for it.

TadleyBaggie

When I started a new job a couple of years ago I had a hire car for a month, then switched to a lease car. My P11D for that year had both cars listed for the appropriate period.

angel_of_dartford

You can only but try. I used to work for an employer who was always changing our cars around, then tried to saddle me with BIK for a 7 series I used twice.

All got a bit fraught, and he smugly told me that there wasn't much I could do.

Spoke to the tax office, who were happy to take photocopies of my diary as proof of what car I drove when. They then reduced my BIK accordingly.

That was 2000 however.

Minrich

lazer-zxr wrote: »

The Passat spent two weeks in a VW dealer as the sunroof leaked. It went to the dealer for an additional week for servicing and suspension bushing replacements etc. It is now back in the dealer (3 weeks and counting) having some bodywork repairs carried out.

The Passat remains my company car after the repair has been carried out.
It's not my choice to be without the car (as would be the case during a holiday abroad).
The Passat has effectively been unavailable for me to use, with the car that is available being one that would incur less tax.

As i sort of thought .... You have no chance of any refund , the car is just defective , its like/similar to breaking your leg and not being able to drive it . But you can try ?

lazer-zxr

Can anyone help me decipher this reply from Baker Tilly. I can't understand that if the cars is unavailable for >30days, I would be able to apply for tax reduction (probably worth around £110 to me).


Hi Lazer-ZXR

Sadly for Lazer-ZXR, legislation is not in his favour as he would still be taxable on the provision of a company car even though it has not been available to him. The reason for this follows s143 and s145 ITEPA 2003 where a company car is unavailable or temporarily replaced.

s143(2)(c) allows for a deduction where the period of unavailability falls within a period of 30 days or more throughout which the car is not available to the employee, and s145(1)(b) refers to provisions where the company car is temporarily replaced and made available to the employee for the whole or part of that period. However, s145(1)(c) refers to both the company car and the replacement car being chargeable to tax under s120 as earnings if, the replacement car is materially better than the normal car. It therefore follows that if the replacement car is not materially better than the normal car, as the employee has been provided with a company car, courtesy or otherwise, a taxable benefit-in-kind has continued to be provided for him and there is no deduction available for a period of unavailability. On this basis, Chris would have the provision of a company car reported as a benefit-in-kind for the whole period that the car was made available to him.

I trust this is helpful, however, do let me know if you have any questions.

Kind regards
Baker Tilly accountant

wealdroam

If you can't get your employer to play ball maybe you need to take the action that angel of dartford took.