company car tax
Discussion
My son has worked for a company since august 2008.
After several assurances from his HR dept, it now appears that he ha snot been paying company car tax.
The car hasn't been assigned to him officially as it is a (rather nice) pool car.
HR tell him that it's up to him to inform the taxman, but then what happens?
Whats his best course of action to mitigate his pain?
After several assurances from his HR dept, it now appears that he ha snot been paying company car tax.
The car hasn't been assigned to him officially as it is a (rather nice) pool car.
HR tell him that it's up to him to inform the taxman, but then what happens?
Whats his best course of action to mitigate his pain?
It rather depends what he has used the car for. If he used it solely for business purposes and it was available to others I doubt HMRC would see it as his. On the other hand if he has been taking it home and using it to take his GF out he should pay tax like everybody else.
As for his employer I do believe it is their duty to declare it a pool car or his, and if it is his this should be part of the Contract of Employment which he should have signed - simple.
As for his employer I do believe it is their duty to declare it a pool car or his, and if it is his this should be part of the Contract of Employment which he should have signed - simple.
Each year the employer notifies the Revenue about the various Benefits in Kind (BIK) that they have supplied to their employees. They do this by completing a Form P11d for each employee that had a BIK. The provision of a car is a BIK and therefore would be shown on this P11d.
The problem is that the BIK is submitted to HM Revenue and Customs (HMRC)AFTER the tax year has ended. For example, the P11d for your son covering the tax year ended 5 April 2009 will be submitted by his employers to HMRC sometime between 6 April 2009 and 6 July 2009 (this is the latest date allowed for submitting P11ds).
For smaller value BIKs (such as Medical or Dental Insurance) the Revenue are not too concerned about getting the data AFTER the relevant tax year. This is because the amount of tax at stake is generally fairly low and easily collectable by a small adjustment to the employee's PAYE Coding for the following year.
Cars, however, generate too big an amount for a simple coding adjustment so they usually want this information DURING the tax year that the benefit is being received.
Your son received his company car in August 2008 so he is definitely liable to Income Tax in the tax year 2008/09 on this car. In order that the Revenue can get the car information in advance of the end of the tax year (and therefore adjust his 2008/09 coding to take the car benefit into account properly in the correct year, they DO have an additional form that the EMPLOYER should have filled out and sent to HMRC within a short time of the car being made available to your son. This form is called a P46 (Car) and his HR department is WRONG to tell him that it was up to him to notify HMRC. They should have completed and submitted the P46(Car)form months ago.
Having said that, your son should really take matters into his own hands and notify HMRC now of the car. He needs to tell them the make, model, list price and CO2 rating of the vehicle. He will also need to let them now if the employer is paying for his fuel.
The problem is that the BIK is submitted to HM Revenue and Customs (HMRC)AFTER the tax year has ended. For example, the P11d for your son covering the tax year ended 5 April 2009 will be submitted by his employers to HMRC sometime between 6 April 2009 and 6 July 2009 (this is the latest date allowed for submitting P11ds).
For smaller value BIKs (such as Medical or Dental Insurance) the Revenue are not too concerned about getting the data AFTER the relevant tax year. This is because the amount of tax at stake is generally fairly low and easily collectable by a small adjustment to the employee's PAYE Coding for the following year.
Cars, however, generate too big an amount for a simple coding adjustment so they usually want this information DURING the tax year that the benefit is being received.
Your son received his company car in August 2008 so he is definitely liable to Income Tax in the tax year 2008/09 on this car. In order that the Revenue can get the car information in advance of the end of the tax year (and therefore adjust his 2008/09 coding to take the car benefit into account properly in the correct year, they DO have an additional form that the EMPLOYER should have filled out and sent to HMRC within a short time of the car being made available to your son. This form is called a P46 (Car) and his HR department is WRONG to tell him that it was up to him to notify HMRC. They should have completed and submitted the P46(Car)form months ago.
Having said that, your son should really take matters into his own hands and notify HMRC now of the car. He needs to tell them the make, model, list price and CO2 rating of the vehicle. He will also need to let them now if the employer is paying for his fuel.
Edited by Eric Mc on Thursday 26th February 23:01
Eric Mc said:
Your son received his company car in August 2008 so he is definitely liable to Income Tax in the tax year 2008/09 on this car. In order that the Revenue can get the car information in advance of the end of the tax year (and therefore adjust his 2008/09 coding to take the car benefit into account properly in the correct year, they DO have an additional form that the EMPLOYER should have filled out and sent to HMRC within a short time of the car being made available to your son. This form is called a P46 (Car) and his HR department is WRONG to tell him that it was up to him to notify HMRC. They should have completed and submitted the P46(Car)form months ago.
I can vouch for this,I changed my company car in December and recieved a new notice of coding in the middle of January...Ozone said:
Eric Mc said:
They should have completed and submitted the P46(Car)form months ago.
But don't assume that they have done this.Get your son to call his tax office and tell them the situation.
The tax on company cars is sizeable and the Revenue will not accept the excuse "I thought my employer was supposed to tell you" as a reason for not paying tax. As I said in my post, your son needs to take the initiative here and contact HMRC himself. The contact telephone number and tax references will all be shown on his most recent Coding Notices.
Eric
What is the situation in UK for real company cars, ones that actually owned by a company, not ones that are given as a benifit and part of a package.
Business owner, one car allocated to business use with another car available.
Sole trader
Incorporated (LLC)
Partnership
All fully deductable, depreciable 5 or 7? maintenance insurance petrol 100% ? Assuming one keeps cheating to a minimum and is reasonably sensible
What is the situation in UK for real company cars, ones that actually owned by a company, not ones that are given as a benifit and part of a package.
Business owner, one car allocated to business use with another car available.
Sole trader
Incorporated (LLC)
Partnership
All fully deductable, depreciable 5 or 7? maintenance insurance petrol 100% ? Assuming one keeps cheating to a minimum and is reasonably sensible
Eric Mc said:
Each year the employer notifies the Revenue about the various Benefits in Kind (BIK) that they have supplied to their employees. They do this by completing a Form P11d for each employee that had a BIK. The provision of a car is a BIK and therefore would be shown on this P11d.
The problem is that the BIK is submitted to HM Revenue and Customs (HMRC)AFTER the tax year has ended. For example, the P11d for your son covering the tax year ended 5 April 2009 will be submitted by his employers to HMRC sometime between 6 April 2009 and 6 July 2009 (this is the latest date allowed for submitting P11ds).
For smaller value BIKs (such as Medical or Dental Insurance) the Revenue are not too concerned about getting the data AFTER the relevant tax year. This is because the amount of tax at stake is generally fairly low and easily collectable by a small adjustment to the employee's PAYE Coding for the following year.
Cars, however, generate too big an amount for a simple coding adjustment so they usually want this information DURING the tax year that the benefit is being received.
Your son received his company car in August 2008 so he is definitely liable to Income Tax in the tax year 2008/09 on this car. In order that the Revenue can get the car information in advance of the end of the tax year (and therefore adjust his 2008/09 coding to take the car benefit into account properly in the correct year, they DO have an additional form that the EMPLOYER should have filled out and sent to HMRC within a short time of the car being made available to your son. This form is called a P46 (Car) and his HR department is WRONG to tell him that it was up to him to notify HMRC. They should have completed and submitted the P46(Car)form months ago.
Having said that, your son should really take matters into his own hands and notify HMRC now of the car. He needs to tell them the make, model, list price and CO2 rating of the vehicle. He will also need to let them now if the employer is paying for his fuel.
Assuming that is, that it is a company car, rather than a pool car. Just becuase he has use of it during working hours does not make it a company car. The problem is that the BIK is submitted to HM Revenue and Customs (HMRC)AFTER the tax year has ended. For example, the P11d for your son covering the tax year ended 5 April 2009 will be submitted by his employers to HMRC sometime between 6 April 2009 and 6 July 2009 (this is the latest date allowed for submitting P11ds).
For smaller value BIKs (such as Medical or Dental Insurance) the Revenue are not too concerned about getting the data AFTER the relevant tax year. This is because the amount of tax at stake is generally fairly low and easily collectable by a small adjustment to the employee's PAYE Coding for the following year.
Cars, however, generate too big an amount for a simple coding adjustment so they usually want this information DURING the tax year that the benefit is being received.
Your son received his company car in August 2008 so he is definitely liable to Income Tax in the tax year 2008/09 on this car. In order that the Revenue can get the car information in advance of the end of the tax year (and therefore adjust his 2008/09 coding to take the car benefit into account properly in the correct year, they DO have an additional form that the EMPLOYER should have filled out and sent to HMRC within a short time of the car being made available to your son. This form is called a P46 (Car) and his HR department is WRONG to tell him that it was up to him to notify HMRC. They should have completed and submitted the P46(Car)form months ago.
Having said that, your son should really take matters into his own hands and notify HMRC now of the car. He needs to tell them the make, model, list price and CO2 rating of the vehicle. He will also need to let them now if the employer is paying for his fuel.
Eric Mc said:
Sorry, that is too vast a topic for me to tackle for free.
Ring me up and I'll negitiate a fee - or speak to your accountant.
There are limits to what I'll post up on PH.
No problem, I was just curious, I left quite a few years ago.Ring me up and I'll negitiate a fee - or speak to your accountant.
There are limits to what I'll post up on PH.
My accountantant is American, he is fairly competant but that may be asking a lot from him
Cheers
jeff m said:
Eric Mc said:
Sorry, that is too vast a topic for me to tackle for free.
Ring me up and I'll negitiate a fee - or speak to your accountant.
There are limits to what I'll post up on PH.
No problem, I was just curious, I left quite a few years ago.Ring me up and I'll negitiate a fee - or speak to your accountant.
There are limits to what I'll post up on PH.
My accountantant is American, he is fairly competant but that may be asking a lot from him
Cheers
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