Company car tax when not used for BIK

noody123

Hi all,

I recently started a new job that provides a company car for work use (I work from home as part of my employment contract).  They also insure and allow it to be used for personal use. (I have never had a company car before).

My question is, I have my own car for personal use and will not, and have not used the company car for personal use (only for work) (milage used has to be accounted for and is checked).  My employer advised me to log my car with HMRC (P11D) asap as HR often don't do it for months.  I spoke to HMRC who after asking lots of questions told me as I am not using the car for personal gain I do not need to register it and should not be paying BIK tax on it.

I asked them to register it until I could discuss this with my employer.  The reply from my employer was the car is available for your personal use so you must pay corporate tax.

This seems completely wrong to me.  As far as I can tell if I drove to an office to collect and drop the car off every day with no personal use I would not need to pay tax on it.  As I am a home worker my home is my office, my companies office is over 300 miles away (not viable for the drop off and collect every day).

Should I be paying BIK (p11d) or not?  HR told me to talk to HMRC, but they expect me to pay, HMRC told me I should not be paying BIK?  Union where unsure told me to talk to HMRC and HR?

Any help or advice would be appreciated.  

Regards

Tracy

Pennywise

The law says that if it's "available" for private use, then it's liable as a benefit in kind, whether you actually use it or not.

To avoid the BIK charge, it needs to be made unavailable.  Given your circumstances, you'd need a letter from your employer (or part of your contract of employment) that you were prohibited from using it for private use, and you'd need the company car insurance policy to clearly state that allowed use in business use only and that "social domestic and private" use wasn't covered.

Brie

isn't the alternative to tell the employer you don't want the company car?  you would then need business use on your insurance for your car and the employer would need to pay mileage for you using it for work - when you need to.  I believe (but do check) that you might get an extra payment to compensate for not given them the expense of you having their car.

maisie_cat

To be allowed as business only with no BIK you would probably need to store the vehicle at your employers premises, then travel there to pick up when you need to use it. If you can convert the car to a car allowance as Brie suggests that might be your best bet.

Dazed_and_C0nfused

I spoke to HMRC who after asking lots of questions told me as I am not using the car for personal gain I do not need to register it and should not be paying BIK tax on it.

Sadly you appear to have spoken to someone who doesn't know the rules.

From what you have posted you would be liable to pay tax on the benefit.  Having access a company car which is not available for private use is extremely difficult to achieve, not least because it usually requires some additional from your employer.

[Deleted User]

Why is the employer asking an employee to 

‘log my car with HMRC (P11D) asap as HR often don't do it for months’

Forms P11D are returns of benefits in kind received by an employee in a tax year and it is the responsibility of the employer to submit.

The advice received from both employer and HMRC leaves a lot to be desired here.

noody123

Hi all

Thank you for the advise.  My own car would not cope with the daily millage required for my job. (it's old). Looks like I am stuck with BIK tax.  Still seems wrong, but will accept sometime it is what it is.

[Deleted User]

noody123 said:

Hi all

Thank you for the advise.  My own car would not cope with the daily millage required for my job. (it's old). Looks like I am stuck with BIK tax.  Still seems wrong, but will accept sometime it is what it is.

A bit radical but - is there any possibility that you could ask for a company van instead?

sheramber

[Deleted User] said:

Why is the employer asking an employee to 

‘log my car with HMRC (P11D) asap as HR often don't do it for months’

Forms P11D are returns of benefits in kind received by an employee in a tax year and it is the responsibility of the employer to submit.

The advice received from both employer and HMRC leaves a lot to be desired here.

Are P11Ds not sent after the end of the tax year? By which time the OP would have an underpayment of tax.

If he advises HMRC now they can amend his code number to reduce the underpayment at the end of the year.

[Deleted User]

Yes - they are and the instruction for the employee to ‘log a P11D’ makes no sense therefore. The new benefit should be reported on a P46 (Car) but by the employer.

https://www.gov.uk/government/publications/paye-car-provided-to-employee-for-private-use-p46car

Dazed_and_C0nfused

Employees can also notify HMRC as well now, presumably to avoid delays to their tax code being adjusted.

https://www.gov.uk/update-company-car-details