Company Car

FredyBs

Hello,

I'm starting a new job in January and I will be given a company car as part of my benefit package. As this is my first company car I did a good research on the BIK and associated tax implications so picked a hybrid car which would be much cheaper for me compared to other petrol or diesel engines. I will have a private use of the car so I think I'm fully aware of the taxes I will pay.

However, the car is on order so I won't have it until May 2020, and in the meantime I will have a pool car to use for business. The pool car is a diesel so it will be with high BIK.

I would like to ask, would I be fully taxed on the use of the pool car if I use for private?
Is there any way to reduce any tax if I only use a few days a month for private?

My goal is not to pay very high taxes for those months until my hybrid car arrives.

I will appreciate any advice. Thank you!

Pennywise

If you take the "pool car" home then it's no longer a "pool" car and it becomes a taxable BIK on you. However, if you make your own way to/from your workplace and pick up the "pool" car for your work journeys and then return it at the end of the day, then it's not a taxable BIK.

How much/little you use a car for private use doesn't matter - it's the same BIK when it's "available for private use" whether you use it or not.

FredyBs

Pennywise wrote: »

If you take the "pool car" home then it's no longer a "pool" car and it becomes a taxable BIK on you. However, if you make your own way to/from your workplace and pick up the "pool" car for your work journeys and then return it at the end of the day, then it's not a taxable BIK.

How much/little you use a car for private use doesn't matter - it's the same BIK when it's "available for private use" whether you use it or not.

I forgot to mention that my employment contract is home-based. I will have the car available all the time, and would intent to use it for private over the weekends.

In that case would I have to pay BIK on the "pool car" I'm given for 4 months, and then it will be changed when my hybrid car arrives? I would expect the BIK on the "pool car" to be a lot higher than the hybrid I have selected.

Pennywise

FredyBs wrote: »

In that case would I have to pay BIK on the "pool car" I'm given for 4 months, and then it will be changed when my hybrid car arrives?

Yes, you will.

jaybeetoo

Have you got your own car at the moment? Could you keep it, and would your new company give you a monthly car allowance, until your new company car is delivered?

FredyBs

I have a car that I use at the moment, so I was thinking if I will be hit by a large BIK tax, I might take the pool car as business use only, and still drive my other car until I get the hybrid. The company won't pay monthly car allowance unfortunately.

Thanks for the response all I think this clarifies my questions, much appreciated.

Dazed_and_confused

so I was thinking if I will be hit by a large BIK tax, I might take the pool car as business use only, and still drive my other car until I get the hybrid.

I'm not sure you understand car benefit rules. If the company car is available then there will be a benefit.

jaybeetoo

“To be exempt, you [your new employer] must tell your employee [you] not to use the vehicle for private journeys and check that they don’t.”

If your employer won’t do this then the temporary car must remain a pool car. You would have to collect it from your employer when you need it for a business journey, returning it immediately afterwards. The car would have to be available for other employees to use when you are not using it for business (i.e. it can’t be sat outside your home).