Company car benefits

StokesC_2

Hi, my husband has recently changed jobs and as part of his new job he gets a company car with fuel benefit (private and business). He has now been told by HMRC that he owes over 1000 in tax after only working for the company for 2 months and when he questioned this they said it was because he still had the company car from his previous job as a tax benefit. Even though he no longer has this car as it was with his old employer. They have said that each car is taxed yearly so he has too many tax benefits on his tax code. I cannot understand why he is paying tax on a vehicle he no longer has, as technically he only had the car from April till August so why should it still be on his tax code? He did inform the tax office that he no longer had the car when he finished the last job. Should mention that the old car did not include petrol and he had to pay for private miles. All the tax office say is that he has to continue paying for the old car till April 2019. His company are trying to change the company fuel benefit for next April so that we pay for private miles as he doesn’t use the car that much privately so the tax implication of fuel benefit is making us worse off but that may not happen till April. Changing jobs has made us worse off not better off. Any advice?

Darksparkle

I would suggest posting on the cutting tax board as this doesn't relate to benefits (state benefits, tax credits etc).

Dazed_and_confused

You do have to pay tax on the first car for the whole of this tax year.

But you only pay tax on the benefit arising in the period from April until the car was no longer available.

So you might start the tax year with say Car Benefit of £4800 (the full years benefit in kind value) but if the car stops being available after 4 months the benefit is only £1600 and you have to pay tax on £1600 for the whole year i.e. the tax code needs to include £1600 until 5 April 2019 (instead of £4800).

Changing jobs often leads to people owing tax, it's quite normal. You can be paid twice in one tax month, once by the original company and then by the new company. If you cannot give the new company a P45 they will use the emergency tax code but that means you receive two lots of Personal Allowance in one month so underpay. And this doesn't take into account any benefits you have.