Is my employer evading class 1A NICs on company pool vehicles?

AndyDufresne

My employer provides some employees with vans that they class in their vehicle policy as 'pool vehicles'. The employees that have them work as 'mobile' guys, e.g. they have no permanent site that they work at. They don't work from home. The employer lets the employees take the vans home overnight every day without fail; the employees are never asked to leave them at any of the sites or the company address.

The company occasionally rotates the vans around, presumably to fulfil one of the 5 criteria for a pool vehicle (i.e. each van is not exclusively used by one employee). This happens I believe about once a year (or every 20,000 miles on the vehicle). However, apart from this time the vehicle is never used in practise by anyone else besides the particular employee.

The employer also allows the employees to use the vehicle for independent (non-incidental), non-business (personal) usage but deducts a mileage cost from salary (miles * cost per mile set by company). The vehicle policy does not explicitly state that personal mileage is allowed or disallowed, but the management say that personal mileage is allowed and explains how it works when the employee fills out the monthly mileage log for both business and personal mileage.

The vehicle policy simply states that the employee is responsible for sorting their own tax affairs, however no P11D is provided to the users of the "pool" vehicles.

Is my employer breaking the law and avoiding class 1A NIC contributions (and therefore, are all pool vehicle users also evading BIK tax)?

If so, can I claim misrepresentation damages for falsely representing the vehicle as a pool vehicle and having to pay back-taxes?

Devongardener

I believe that it hinges on whether the vehicles are available for other employees use.  I suspect that’s why they are rotated between users periodically.   It might not stand up to close scrutiny if the employer ever gets an HMRC compliance visit,  but those are pretty rare these days.

AndyDufresne

Devongardener said:

I believe that it hinges on whether the vehicles are available for other employees use.  I suspect that’s why they are rotated between users periodically.   It might not stand up to close scrutiny if the employer ever gets an HMRC compliance visit,  but those are pretty rare these days.

I've done about 20k miles over about 12 months in the same vehicle without anyone else ever holding the steering wheel. Pretty sure this is how it is for every other employee as well.

In my mind the fact that it is taken home every day without fail is pretty damning. I've read elsewhere that the taxman regards it as a pool vehicle if it is taken home no more than 60% of the time.

Wouldn't the fact that employees are free to use the vehicle for personal use in a basically unlimited sense also make it not a pool vehicle? 

https://www.gov.uk/guidance/use-of-company-pooled-cars-or-vans-480-chapter-15

Would me reporting them to HMRC trigger a compliance visit?

Savvy_Sue

What are you hoping to achieve?

TELLIT01

If the vehicle is not classed as a pool car the OP will also have a tax liability for the sole use.  Is that really what they ar trying to achieve?  I get the impression that there has been a falling out at work, the OP is planning to leave and hoping to land the employer in the !!!!!! when they do.  Of course I could be totally wrong and the OP simply thinks that any form of tax avoidance is wrong and is happy to cough up potentially thousands of pounds to put things right.

Altior

How are you insured, if you take it down to Waitrose to do your weekly grocery shop for example (purely personal use)?  

AndyDufresne

TELLIT01 said:

If the vehicle is not classed as a pool car the OP will also have a tax liability for the sole use.  Is that really what they ar trying to achieve?  I get the impression that there has been a falling out at work, the OP is planning to leave and hoping to land the employer in the !!!!!! when they do.  Of course I could be totally wrong and the OP simply thinks that any form of tax avoidance is wrong and is happy to cough up potentially thousands of pounds to put things right.

Yes, I think a company potentially avoiding tax/NIC in the tens of thousands of pounds is wrong. What frustrates me is that the employer has represented it as a pool vehicle when it might potentially not be, and if true has caused a lot of employees to incur an unexpected tax liability. Does thinking that is wrong make me a bad person?

Altior said:

How are you insured, if you take it down to Waitrose to do your weekly grocery shop for example (purely personal use)?  

They have a company fleet policy that apparently covers personal use, I don’t know if the insurance is valid if it’s non-incidental personal usage. 

Altior

So definitely you are potentially uninsured if using the vehicle for purely personal purposes. That would be the most concerning element for me (if using it for personal). I would want to have sight of fleet insurances for business vehicles (vans) that covers unlimited, unspecified personal use (would be unusual) to ensure I was driving legally. 

AndyDufresne

Altior said:

So definitely you are potentially uninsured if using the vehicle for purely personal purposes. That would be the most concerning element for me (if using it for personal). I would want to have sight of fleet insurances for business vehicles (vans) that covers unlimited, unspecified personal use (would be unusual) to ensure I was driving legally. 

That's not good. They have authorised me to drive long distance personal usage when on annual leave so I hope the policy does cover this sort of thing. Is it possible that their policy could theoretically cover this? 

tizerbelle

AndyDufresne said:

Altior said:

So definitely you are potentially uninsured if using the vehicle for purely personal purposes. That would be the most concerning element for me (if using it for personal). I would want to have sight of fleet insurances for business vehicles (vans) that covers unlimited, unspecified personal use (would be unusual) to ensure I was driving legally. 

That's not good. They have authorised me to drive long distance personal usage when on annual leave so I hope the policy does cover this sort of thing. Is it possible that their policy could theoretically cover this? 

Depends on the policy wording entirely.  You need to check it.  Last 2 employers, policy covered any person authorised to drive by the company whether in connection with company business or not.  So would be covered but other policies could be different. 

AndyDufresne

tizerbelle said:

AndyDufresne said:

Altior said:

So definitely you are potentially uninsured if using the vehicle for purely personal purposes. That would be the most concerning element for me (if using it for personal). I would want to have sight of fleet insurances for business vehicles (vans) that covers unlimited, unspecified personal use (would be unusual) to ensure I was driving legally. 

That's not good. They have authorised me to drive long distance personal usage when on annual leave so I hope the policy does cover this sort of thing. Is it possible that their policy could theoretically cover this? 

Depends on the policy wording entirely.  You need to check it.  Last 2 employers, policy covered any person authorised to drive by the company whether in connection with company business or not.  So would be covered but other policies could be different. 

I have looked at the insurance certificate and it states that it covers “business use for the policyholder only”. But the company vehicle policy states that the employer insures both personal and business use. Is it possible that they have a separate policy for personal use?