Hypothetical but potential situation in the near future:- I start a new job and the role includes a company car. However, I have my own car which I don't intend to sell, and I use the company car only for visiting clients and driving to the office (this doesn't class as commuting as it's a home based role).

 

For private/personal use, I continue to use my own car and my own fuel.

 

So - would tax be payable on this? The HMRC website seems to suggest that it's only a taxable benefit if it's used for your/your family personal use, whether or not you pay for the fuel used on private trips.

 

Anyone ever done this?

 

thanks

 

Martin

You might have difficulaty proving that you're not using the works' vehicle for personal mileage (you probably need logs of every trip showing start, end and distance), but you're correct that if you don't use it for personal mileage (including commuting) then there is no "benefit in kind" tax due.

Also you may not get away with commuting to the office on a regular basis, if officially employed working from home, you may need to ensure that you have a workspace at home.

 

I guess it depends on the role that you are doing and how often you have to visit the office, as I would say that is the grey area that you may get caught on.

 

It might be worth checking with a Tax specialist as to how often you could use the company car to visit the office, before it is classed as private commuting mileage.

I suspect your employer will still record the "benefit" on your P11D, so you'll end up with the tax bill.  

If your employer is in agreement get them to class it as a pool car. No tax will be payable.

If the car stays at the site of the work then no P11D benefit should be accruing as you have no personal possible use of the vehicle.  However things can take a downturn if ever things work out that you have the car at your abode for any period/s of time.

 

Proper mileage logs in this scenario will help when it comes to HMR&C sticking their oar in.  It will be your employer who gets investigated by the way, so the mileage logs will be wanted by them I imagine.

 

Most company cars will be simply available for private use and you get a P11D annual benefit charge based on list price / CO2 combination.  Often it can be around £3k to £4k so looking at an actual taxable benefit of 13.8% of that.

The first time you stop en route and do a bit of personal shopping you become liable, even for a packet of sweets or some ciggies.

Can you honestly state you will NEVER do that?

Can you not ask your employer to give you an allowance in lieu? Co cars are a rarity these days, even for sales people. Last 3 companies I have worked for, we've all had an "allowance".

If your employer is in agreement get them to class it as a pool car. No tax will be payable.

Don't bother even trying

 

The rules on pool cars are very clear, the main one relevant to your situation being that it isn't parked overnight "on or in the vicinity of the employees private house."

 

Generally you'll find yourself banging your head agqainst a brick wall on this one.

Having driven Coy Cars for over 30 years, many of my colleagues tried to get out of the Coy. Car tax on the same basis of only using it for business use, and having a personal car for private use. I cannot recall a single case where they managed this.

HMRC simply regarded the car as being available for private use if it was parked at home overnight, and charged accordingly. We all had to produce accurate mileage logs for internal use and to repay private petrol use, but they would not accept these, as they could (and were) be falsified relatively easily.

Thanks all.

 

Looks like a non starter then :-(

Any reason why you wouldn't sell your own car and use the company car for personal use?

 

Could this actually prove to be more cost effective?

I have run a cc for 12 years now but I still have my own car as well.

I kept it at first as I didn't know how long I would be there.

But the extra tax I pay is no more the fuel I would use driving to and from work. 

This means my own car is my weekend toy so I can run whatever I want at weekends.

I also get private fuel and although I don't do much private mileage most weeks I don't have to worry about my holidays in Scotland.

 

So although I pay extra tax for the cc I still think it is a perk.

Could you get a company van? As the wording is a little different on these and you can do what you want above.

Or one of those 4 door pickup machines.  See a lot of company directors having seriously posh ones as company cars as they are classed as vans for tax (payload > 1 ton)

Any reason why you wouldn't sell your own car and use the company car for personal use?

 

Could this actually prove to be more cost effective?

Because I like my car, and I would lose money selling it.

 

I can see why some companies refuse to offer a car allowance. Let's say for example, that my car broke a cam belt. It would costs me thousands to fix - that I don't have - and whilst it was off the road I would be unable to work. Even the allowance system wouldn't pay for that. Whereas with a company car, that would be someone else's problem and I'd have a different car on the drive the next day (or so).

 

I do actually know someone who runs a Corsa van because it's cheaper than a company car. Another of my mates is a recent convert to hybrids for company cars as they are practically free, tax-wise, compared to most other cars.

Or just go for the cheapest company car you can get, a friend of mine is a head of business at a Vauxhall dealers and can have anything he likes inc a VXR V8 but drives s basic Corsa at about £30 month tax. But has a very nice weekend car.

I never used to use my company car for private use whatsoever for several years, as at the time we had a private car at home more suited to our needs. There was never any doubt to the tax office that it was for business use only as my company cars all had tracker systems fitted, so everything was logged from the day I picked it up to the day it went, usually three years for each car.

 

I tried to avoid paying company car tax but the tax office view was if the car was available for private use, whether I used it or not, I had to pay the tax. In other words unless the keys were kept at the company office, which they weren't as I had them at home with me, the car was available for private use, the fact I could prove without doubt I didn't use it privately meant nothing. As the car was made available I had to pay the tax.

 

We now don't have a private car because of this (my wife also has a company car).

The wording in the relevant Tax legislation is "available to be used".

Note the first word "AVAILABLE".

The wording in the relevant Tax legislation is "available to be used".

Note the first word "AVAILABLE".

Exactly my point. As you have the keys the car is 'available' for private use, whether you choose to use it not.

Don't bother even trying

The rules on pool cars are very clear, the main one relevant to your situation being that it isn't parked overnight "on or in the vicinity of the employees private house."

Generally you'll find yourself banging your head agqainst a brick wall on this one.

Having driven Coy Cars for over 30 years, many of my colleagues tried to get out of the Coy. Car tax on the same basis of only using it for business use, and having a personal car for private use. I cannot recall a single case where they managed this.

HMRC simply regarded the car as being available for private use if it was parked at home overnight, and charged accordingly. We all had to produce accurate mileage logs for internal use and to repay private petrol use, but they would not accept these, as they could (and were) be falsified relatively easily.

I don't really need mine privately but ad above you cannot get out of it if you take it come.

Some cocky colleagues bragged they'd done it citing based at home, all mileage accountable and verifiable as business only, only a week back for the taxman to send them demands for several years car tax.

It's a benefit if it's available to you, even if you don't use it.

Yes - I get a P11D charge for the private healthcare / BUPA thingy through work.  I've not had to use it at all in 8 years but I still pay for the privilege.

Although you will pay the tax for the car, you should be able to lose the private fuel benefit, so long as you have records to show that you do no private miles, and have a system in place to pay for the fuel used if you do.

Although you will pay the tax for the car, you should be able to lose the private fuel benefit, so long as you have records to show that you do no private miles, and have a system in place to pay for the fuel used if you do.

 

Your records would prove nothing.

Even stopping to buy a packet of sweets or cigarettes or even buying your lunch during your "work" journey in that car means you have used it for PERSONAL purposes, and it was therefore "AVAILABLE to be used".

When will people understand the Rules?

Edited 31 January, 201511 yr by Llanigraham

If an employment contract stated you could not use the car for personal use this would be sufficient (there is case law on this), however, that would require you to get your company to agree to give you a revised contract.

As I said before vans are worked differently and hence would be tax free in what you are trying to do.

As for stopping for a sandwich/few bits on the way hone in the case of vans this is clearly covered under incidental use. It would probably go the same way with a car issued with no personal use condition.

If an employment contract stated you could not use the car for personal use this would be sufficient (there is case law on this), however, that would require you to get your company to agree to give you a revised contract.

As I said before vans are worked differently and hence would be tax free in what you are trying to do.

As for stopping for a sandwich/few bits on the way hone in the case of vans this is clearly covered under incidental use. It would probably go the same way with a car issued with no personal use condition.

Which is why I've asked for one previously, but as yet to get one.

 

Now the new folk are getting them, just as I apply for a new position internally which would mean sticking with a car if it comes off.