Company Car Tax / BIK whilst Shielding

Mahsroh

Hi, as like most people i'm currently working from home but also staying at home completely due to being vulnerable, so i'm not even popping to the local shops. My company car has been parked up outside the house for over a week now and will potentially remain there unused for as long as another 11 weeks! In this time, I will have paid tax to the tune of £600 in income tax for the benefit of having a car that i'm not using. Can I claim this money back of HMRC or will they deem that because I have access to the car with it being parked up outside that it's still a benefit? 

sheramber

The benefit is having a car available- not the use you make of it.

Mahsroh

Thanks - that's what I suspected. I would ask my employer to come and take it away - but that's not an essential journey!! :-( 

LordRocket

I phoned HMRC with this exact same question and initially was told that because I technically still had use of the car, tax would need to be paid. However when I pushed a little they told me that as it was not feasible for me to return the car they would settle for all the keys and tags being returned to Head Office for the duration. When I asked if they needed proof of this they replied that my next P11D would reflect the period the car was unavailable and my tax would be amended then. 

Am waiting to hear from HO if this is acceptable to them. 

unholyangel

LordRocket said:

I phoned HMRC with this exact same question and initially was told that because I technically still had use of the car, tax would need to be paid. However when I pushed a little they told me that as it was not feasible for me to return the car they would settle for all the keys and tags being returned to Head Office for the duration. When I asked if they needed proof of this they replied that my next P11D would reflect the period the car was unavailable and my tax would be amended then. 

Am waiting to hear from HO if this is acceptable to them. 

I doubt simply returning the keys would be enough given HMRCs written guidance states there will only be a reduction to the BIK value if the vehicle is truly unavailable for you to access for a period of at least 30 consequetive days. Their written guidance also explitily states they will accept you dont have access where you don't have the keys and have no power/authority to direct the person with the keys to hand them back. 

While you might not have the keys in the scenario you describe, you'd still have the authority to request them back from your employer. Your employer would need to withdraw the benefit from you for a duration of at least 30 consequetive days and make sure you do not have access to the vehicle during that time. 

jazzert1000

To clarify this issue,we have raised this with our accountants and their advice was ,if you have tracker data that shows you have not used the car HMRC will take that as proof,so no need to hand in keys etc.

So possibly  for the first time ever you will be glad you have a tracker.

Hope this helps

NB I  would confirm this information with  your own accountants.

unholyangel

jazzert1000 said:

To clarify this issue,we have raised this with our accountants and their advice was ,if you have tracker data that shows you have not used the car HMRC will take that as proof,so no need to hand in keys etc.

So possibly  for the first time ever you will be glad you have a tracker.

Hope this helps

NB I  would confirm this information with  your own accountants.

I sincerely hope an accountant didn't give that advice. 

A BIK charge arises if a vehicle is made available to an employee for private use. It doesn't matter whether it's actually used privately or not if the car is available for private use. In order for the BIK to not apply, the contract of employment would need to prohibit private use and you'd need to show there was no actual private use (as per EIM23400). It's a two step test. Just satisfying one step isn't enough. 

jazzert1000

Have you sought any clarification with HMRC?

I will clarify the specifics later today and withdraw the post if I am mistaken.

jazzert1000

unholyangel said:

jazzert1000 said:

To clarify this issue,we have raised this with our accountants and their advice was ,if you have tracker data that shows you have not used the car HMRC will take that as proof,so no need to hand in keys etc.

So possibly  for the first time ever you will be glad you have a tracker.

Hope this helps

NB I  would confirm this information with  your own accountants.

I sincerely hope an accountant didn't give that advice. 

A BIK charge arises if a vehicle is made available to an employee for private use. It doesn't matter whether it's actually used privately or not if the car is available for private use. In order for the BIK to not apply, the contract of employment would need to prohibit private use and you'd need to show there was no actual private use (as per EIM23400). It's a two step test. Just satisfying one step isn't enough. 

Just double checked, and whilst you might have hoped that accountants didn't give that advice,they have.

So the real question is ..................are you feeling lucky?

I am,and will be acting on that advice, will let everyone know if am successful,..........

it might be a while.

Are you allowed access to the internet in prison?

As I have stated in my initial post please speak to your own accountant in the first instance as clearly there are differing opinions on this and it's only HMRC's opinion that counts!

nick74

jazzert1000 said:

unholyangel said:

jazzert1000 said:

To clarify this issue,we have raised this with our accountants and their advice was ,if you have tracker data that shows you have not used the car HMRC will take that as proof,so no need to hand in keys etc.

So possibly  for the first time ever you will be glad you have a tracker.

Hope this helps

NB I  would confirm this information with  your own accountants.

I sincerely hope an accountant didn't give that advice. 

A BIK charge arises if a vehicle is made available to an employee for private use. It doesn't matter whether it's actually used privately or not if the car is available for private use. In order for the BIK to not apply, the contract of employment would need to prohibit private use and you'd need to show there was no actual private use (as per EIM23400). It's a two step test. Just satisfying one step isn't enough. 

Just double checked, and whilst you might have hoped that accountants didn't give that advice,they have.

So the real question is ..................are you feeling lucky?

I am,and will be acting on that advice, will let everyone know if am successful,..........

it might be a while.

Are you allowed access to the internet in prison?

As I have stated in my initial post please speak to your own accountant in the first instance as clearly there are differing opinions on this and it's only HMRC's opinion that counts!

And HMRC's opinion, from their own Employment Income Manual, suggests that your accountant's opinion is wrong:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim23300

unholyangel

jazzert1000 said:

unholyangel said:

jazzert1000 said:

To clarify this issue,we have raised this with our accountants and their advice was ,if you have tracker data that shows you have not used the car HMRC will take that as proof,so no need to hand in keys etc.

So possibly  for the first time ever you will be glad you have a tracker.

Hope this helps

NB I  would confirm this information with  your own accountants.

I sincerely hope an accountant didn't give that advice. 

A BIK charge arises if a vehicle is made available to an employee for private use. It doesn't matter whether it's actually used privately or not if the car is available for private use. In order for the BIK to not apply, the contract of employment would need to prohibit private use and you'd need to show there was no actual private use (as per EIM23400). It's a two step test. Just satisfying one step isn't enough. 

Just double checked, and whilst you might have hoped that accountants didn't give that advice,they have.

So the real question is ..................are you feeling lucky?

I am,and will be acting on that advice, will let everyone know if am successful,..........

it might be a while.

Are you allowed access to the internet in prison?

As I have stated in my initial post please speak to your own accountant in the first instance as clearly there are differing opinions on this and it's only HMRC's opinion that counts!

Personally, I'd get a new accountant if they gave me that advice. This is one of the more clear cut areas of tax imo. They really should not be getting this wrong and if they are, it would make me seriously question what else they're getting wrong. 

The guidance I referred to earlier (EIM23400 - a sister section to the one quoted by nick74) explicitly states:

Thus a provided car will result in liability even if no private use is made of it unless such private use has been specifically prohibited in advance (precisely because it is available).

The legislation behind the charge explicitly states:

118Availability for private use
(1)For the purposes of this Chapter a car or van made available in a tax year to an employee or a member of the employee’s family or household is to be treated as available for the employee’s or member’s private use unless in that year—
(a)the terms on which it is made available prohibit such use, and
(b)it is not so used.