Company Car Tax / BIK whilst Shielding

jazzert1000

Fleetnews  have some current information regarding this subject.

coronavirus-hmrc-to-publish-company-car-tax-guidance

Mahsroh

Thanks for the feedback all. Must admit i'd given up on this one and was coming on here to ask another tax related question and my notifications we're lit up. I may speak to my Employer about handing the keys in. I have still got 8/9 weeks to go so it's a reasonable amount of money. 

jazzert1000

I can confirm I have had a significant reduction in my tax bill since I removed my car.

Apparently one of my colleagues has been advised he can still use it for business use if needed(not sure about that).

However, as with all things tax related it ain't over till HMRC say so.

The money might just be resting in my account!

whizzywoo

jazzert1000 said:

I can confirm I have had a significant reduction in my tax bill since I removed my car.

Apparently one of my colleagues has been advised he can still use it for business use if needed(not sure about that).

However, as with all things tax related it ain't over till HMRC say so.

The money might just be resting in my account!

When you say that you have had a significant reduction in your tax bill, do you mean that your code number has increased, thereby reducing the amount of tax deducted by PAYE on your salary?

If this is the case then you have not necessarily reduced your tax bill.  What are your employers going to declare on your P11d as car benefits in kind for the 1920/21 tax year?  You might be paying less tax now but only because you have had your tax code changed to reflect something which may not be true.

jazzert1000

They are going to declare no car available for as long as it doesn't move.This will be confirmed by my tracker which is still sitting on 0 miles and reporting the same location since lockdown began.

I appreciate your scepticism, I am  a bit concerned that HMRC will be coming back for it so I won't be spending any of the cash.

Will be back here in 2021 letting you know how I had to give back £1200!

Jeremy535897

My understanding is that you have to post the keys, fob etc back to the employer for a period of at least 30 days to hope to reduce the benefit in kind.

Grumpy_chap

I am not sure about this, but if the employer put the car on SORN, would that make the car unavailable for use?  The keys being with the storage company is reasonable, with the employee effectively being the storage company.  From a personal tax perspective, isn't what you pay fundamentally based on the P11D reporting after the end of the tax year?

Jeremy535897

SORN doesn't count. From  https://www.gov.uk/guidance/how-to-treat-certain-expenses-and-benefits-provided-to-employees-during-coronavirus-covid-19#company-car-availability

"Company car ‘availability’

Your employee may have been furloughed or is working from home, because of coronavirus, and provided with a company car which they still have. You should treat the car as being made ‘available for private use’ during this period even if your employee is:

• instructed to not use the car
• asked to take and keep a photographic image of the mileage both before and after a period of furlough
• unable to physically to return the car or the car cannot be collected from the employee

Where restrictions on movement applies because of coronavirus and prevents the car from being handed back or collected, HMRC will accept that a company car is unavailable in the following circumstances:

• where the contract has terminated - from the date that the car keys (including tabs or fobs) are returned to the employer or to a third party as instructed by the employer
• where the contract has not been terminated – after 30 consecutive days from the date that the car keys (including tabs or fobs) are returned to the employer or to a third party as instructed by the employer

The return of keys means that a car cannot be driven in any circumstances even if it is still in the possession of your employee.

We also recognise that following relaxation of coronavirus restrictions, it may take some time to collect cars where contracts have been terminated. As long as your employee continues to have no access to the keys until the car is collected from them, HMRC will still regard the car as being unavailable."

Grumpy_chap

Thanks Jeremy

jazzert1000

I still have the cash at the moment!

Nothing from HMRC yet!

But they know where I live.😐