Company Car Question

[GTO Scott]

Lady S has been told it is very likely she will have to stop using her personal car for company business and start using a company provided vehicle. Sounds good on the face of it but it's actually quite a stty deal.

As she is now with her own vehicle, all she claims is 40p per mile fuel allowance. As the car is hers she is free to choose what she drives, and use it how she likes for personal or business.

The company provided car would mean she would be allocated a car (probably a Peugeot 207), with servicing, tax, MoT, etc, all taken care of, however she would still be responsible for tyres (not something to ignore when she covers 40,000 miles a year), fuel (allowance would drop to 12p per mile), she would not be allowed to use the car for personal mileage, and she would have to pay for accident damage. All for an extra charge of around £120 p/month taken from her wages.

My questions are:
Can they force this on her? When she asked her employers about the lack of personal use, she was told to use my car or keep her car for personal use. As we don't have the space to keep a 4th car, she would have to sell her car.
Is she liable for any damage? Surely this is what insurance is for?
Can they take money from her to pay for the company car and impose a 'no personal mileage' rule?

Thanks!

[KenBlocksPants]

Not sure legally if she can be forced, but my company enforces a strict 'must have a car' policy if doing over 10,000 business miles a year. With a payback of 11p per mile for business fuel.

The strange one here for me is funding your own tyres. Quite unfair as you will be funding tyres used on company business without the recompence (40p a mile now reduced). Especially if the car is being leased for her.

Paying for accident damage again im not certain on, i have had experience of 'all expenses paid' and 'i must pay for the insurance excess in an accident'

[DavesFlaps]

The tyres issue confuses me.

If she's only allowed to use the car on company business, why is she responsible for funding the cost of replacement tyres, as suggested by the OP.

Also, if she's only using the car on company business, do the same company car tax rules apply?

One more thing - commuting to and from work, as far as I know, this is classed as personal mileage - unless she's permanently field-based maybe?

[GTO Scott]

I'm hopefully going to look at her contract tonight.

I don't understand the tyre issue either. She has been told she must pay for tyres (worn or punctured).

She is generally field based (90% on the road, 10% office work).

With regards to damage, I want to know exactly what she is liable for. She gets sent down single track roads regularly, so any car she has had ends up covered in scratches on the nearside. We had the problem cracked with her current car, which came pre-scratched.

Another issue is that the only chance of deciding what she gets as a company car is by requesting that it is a diesel - but that's all. As it's a request she could well end up with a petrol car which makes things even worse.

[CaptainSlow]

Very strange. It will be extremely difficult to convince the HMRC that there is no personal use. Even just taking it home gives her the full tax liability.

What is the £120 per month, is it a salary reduction or BIK tax?

The tyre situation is unacceptable either way. They need to be fully expensed byh the company. How big is the company?

[GTO Scott]

Company in question is a local authority.

I've asked her to bring any documentation she can get about the provided cars home with her.

[Deva Link]

GTO Scott said:

I don't understand the tyre issue either. She has been told she must pay for tyres (worn or punctured).

Leasing companies do generally reserve the right to surcharge if tyres are damamged or wear unreasonably quickly, so the employer is hoping to pass this cost on.

GTO Scott said:

She is generally field based (90% on the road, 10% office work).

If she works from home and that's declared as her normal place of work then there's no company car tax liability for commuting, even for occasional trips to the office.

GTO Scott said:

With regards to damage, I want to know exactly what she is liable for. She gets sent down single track roads regularly, so any car she has had ends up covered in scratches on the nearside. We had the problem cracked with her current car, which came pre-scratched.

Most company insurances have a chunky excess - in my last corporate job is was £1k but I vowed I would never pay it and I had legal advice that it would be unenforceable if the damage occured while on business use for the employer although she wasn't so certain if damage occured while "off-duty".


Being charged £120 to have the car when it's not available for private use is most odd. The employer should be paying for parking and washing it etc.

[Jonathan27]

The BIK (Benefit in Kind) tax rules only apply when there is a 'Benefit. So if she cant use it for personal use, then there is no Benefit, and thus no Tax.

[CaptainSlow]

Jonathan27 said:

The BIK (Benefit in Kind) tax rules only apply when there is a 'Benefit. So if she cant use it for personal use, then there is no Benefit, and thus no Tax.

Yep but can be hard to prove.

See here for guidance

http://www.hmrc.gov.uk/cars/company-cars-factsheet...

[Deva Link]

CaptainSlow said:

Jonathan27 said:

The BIK (Benefit in Kind) tax rules only apply when there is a 'Benefit. So if she cant use it for personal use, then there is no Benefit, and thus no Tax.

Yep but can be hard to prove.

See here for guidance

http://www.hmrc.gov.uk/cars/company-cars-factsheet...

It's not hard to prove at all if the employer prohibits private use and the business mileage records match the car's actual mileage.

The main difficulty in this area comes from people who are allowed to used their car for private use but insist they don't. That doesn't matter - if the car is available for private use then they have to pay BIK tax regardless of whether they use it ot not.