Legally avoiding company car tax?

smjxm09

My son is being promoted in a job he has been in for 6 months and will get a company estate car so he can visit customers. He has found out the car can be used for personal use at 10p per mile to cover fuel.

He is paid from the moment he drives off even if he drives to the station to catch a train to London to work.

Now as my son has his own car with 6,000 miles on the clock and doesn't want the use of the company car for private use. The company car also comes with a tracker so it could prove no private use.

Is there a way to avoid being taxed on this car as the wage rate is still low at £18,000 per year as he doesn't want to lose the benefit of his pay increase?

Dazed_and_confused

Company car tax is not based on use.

It is being available to use which counts. This is a difficult hurdle to overcome as it will inevitably result in additional work (hassle) for his employer to prove this If it is even possible.

Has he gone to the trouble of working out how much tax might be involved?

Depending on the cars price (official list price not purchase price or current value) and emissions level it may be less than he imagines. Unless he has income not disclosed in your op then the benefit would likely be taxed at 20% (unless he is Scottish resident for tax purposes).

00ec25

not what you want to hear but no you cannot avoid being taxed on the car.

what people often fail to grasp is the rule is based on whether the car is available for private use, not whether it is used for private use

the only way a car is judged to be not available is if it is kept at the employer's premises overnight and so your son would have to drive to the office to collect his car each morning then return to the office each night and leave it there. He cannot take it home at the weekends because the second it is sitting on his driveway at home it is available for private use.

the point about paying for private fuel is that eliminates the additional BIK for having free fuel. It does not in anyway impact the BIK for the car itself. If your son does not want to pay tax on the BIK he will have to give up the car and try to get his employer to pay him a cash "car allowance" instead and use his private car for business use.

also your post is a little unclear re him being paid from the moment he leaves home. Being paid for what?
If he drives to the office that is commuting and he would have to repay that at 10ppm to avoid the fuel BIk for such private use as commuting is always taxable.

smjxm09

Thanks for the info. His company is based up north and he will be a southern based engineer who would and could not travel to his HQ.

He is hourly paid so is paid once he sets off from home as traveling to customers is classed as being a at work.

I used to be a BT engineer with a small van who was based at home.
BT had some sort of arrangement as I was not taxed on the vehicle but then private use was a sackable offence. I was hoping this could have applied to my son where his company just banned private use with his agreement to save his tax bill.

It feels like he will be taxed on a tool of the job that he doesn’t want to use outside work.

Dazed_and_confused

You are comparing apples and pears.

Vans have their own rules.

smjxm09

I know what you are saying but as far as I was aware the van was based on a car so was treated as though it was a car except for road tax purposes. The van was a Vauxhall Combo which was based on the Corsa not that this would appear to make a difference in my sons situation.

prowla

Could the company give him a letter saying the car is not available for personal use?

chrismac1

If the car is on his drive for one day that is a taxable benefit in kind. It is not use, but availability, which counts here. Slam dunk.

pjwhit

chrismac1 wrote: »

If the car is on his drive for one day that is a taxable benefit in kind. It is not use, but availability, which counts here. Slam dunk.

This.

The argument is, as Chris says above, availability. I would always ask this one simple question to prove availability.

You're in the house, its late at night and you only have the company car on the drive. There's an emergency and you need to travel 3 mile down the road to the hospital. No taxis are available for at least an hour.

You wouldn't think twice, in fact you wouldn't have even tried a taxi, You'd grab the keys and use the car. And that's why its seen as available. Even if its never used, you have the benefit of an additional car sitting to be used if needed.

choccielover

OP try reading EIM 23400 and 23405 they might help

smjxm09

choccielover wrote: »

OP try reading EIM 23400 and 23405 they might help

That's great. Seems that indeed a company car driver can indeed avoid this company car tax and the info comes from the government website.:beer: