High value company pool cars
Discussion
DO these raise a lot of eyebrows at the Inland Revenue?
Obiously a pool car avoids the associated company car taxes and are a massively exonimical way of owning an expensive car (provided you are comfortable being slightly less than honest as to thier use)
I suppose my question is: Do people regularly get away with this or is it completely unfeasible for some reason?
Obiously a pool car avoids the associated company car taxes and are a massively exonimical way of owning an expensive car (provided you are comfortable being slightly less than honest as to thier use)
I suppose my question is: Do people regularly get away with this or is it completely unfeasible for some reason?
Some people get away with murder.
Someone I know who is an HMRC inspector went to a company and found they had 2 MB CLK's or something on the books but no tax or NI was being paid on them. Book-keeper said there wasn't any due as they were not used by employees - they were being used by the Director's wives.
They weren't very happy with the bill they got.
Someone I know who is an HMRC inspector went to a company and found they had 2 MB CLK's or something on the books but no tax or NI was being paid on them. Book-keeper said there wasn't any due as they were not used by employees - they were being used by the Director's wives.
They weren't very happy with the bill they got.
Guy down the road from me was in the paper a little while ago for successfully arguing that his Diablo should be written off as a 'business necessity' or somesuch. He argued that his company needed to maintain an 'image' and the car was a tool in doing so.
Not sure I'd have the balls to try it on with the taxman to that extent though!
Not sure I'd have the balls to try it on with the taxman to that extent though!
Maxf said:
Guy down the road from me was in the paper a little while ago for successfully arguing that his Diablo should be written off as a 'business necessity' or somesuch. He argued that his company needed to maintain an 'image' and the car was a tool in doing so.
Not sure I'd have the balls to try it on with the taxman to that extent though!
ANY car can be argued that it has a business related element to it. The problem with claiming that a car is a genuine "pool" car is that the car must have ABSOLUTELY NO non-business use at all.Not sure I'd have the balls to try it on with the taxman to that extent though!
Maxf said:
Guy down the road from me was in the paper a little while ago for successfully arguing that his Diablo should be written off as a 'business necessity' or somesuch. He argued that his company needed to maintain an 'image' and the car was a tool in doing so.
Not sure I'd have the balls to try it on with the taxman to that extent though!
That is actually totally feasible, however as Eric said... you'd have a tough time NEVER using it for non-business purposes Not sure I'd have the balls to try it on with the taxman to that extent though!
Also, surely to be a genuine pool car it would have to be insured for any driver etc? Otherwise it could add fuel to the fire of it being a personal car and a tax dodge?
If you can afford something nice, just pay the bill. If not, buy something less flash
No point getting unnecessary attention from the IR is there?
Eric Mc said:
Maxf said:
Guy down the road from me was in the paper a little while ago for successfully arguing that his Diablo should be written off as a 'business necessity' or somesuch. He argued that his company needed to maintain an 'image' and the car was a tool in doing so.
Not sure I'd have the balls to try it on with the taxman to that extent though!
ANY car can be argued that it has a business related element to it. The problem with claiming that a car is a genuine "pool" car is that the car must have ABSOLUTELY NO non-business use at all.Not sure I'd have the balls to try it on with the taxman to that extent though!
Or more precisely would do?
I really cant see them stalking a company over a couple of pool cars as I would imagine it to be a totally uneconomical way of gathering tax which I would think is thier sole criteria?.
But then again-I don't know the limits of thier determination.
blindswelledrat said:
Eric Mc said:
Maxf said:
Guy down the road from me was in the paper a little while ago for successfully arguing that his Diablo should be written off as a 'business necessity' or somesuch. He argued that his company needed to maintain an 'image' and the car was a tool in doing so.
Not sure I'd have the balls to try it on with the taxman to that extent though!
ANY car can be argued that it has a business related element to it. The problem with claiming that a car is a genuine "pool" car is that the car must have ABSOLUTELY NO non-business use at all.Not sure I'd have the balls to try it on with the taxman to that extent though!
Or more precisely would do?
I really cant see them stalking a company over a couple of pool cars as I would imagine it to be a totally uneconomical way of gathering tax which I would think is thier sole criteria?.
But then again-I don't know the limits of thier determination.
They're probably that petty.
My advice, if they genuinely will be pool cars then go ahead if on the other hand one director/employee may seem to have an unusually large use of the car then stick to company car rules. And yes the revenue are picky enough to do a stake out over a couple of pool cars if they think your defrauding them.
IanMorewood said:
My advice, if they genuinely will be pool cars then go ahead if on the other hand one director/employee may seem to have an unusually large use of the car then stick to company car rules. And yes the revenue are picky enough to do a stake out over a couple of pool cars if they think your defrauding them.
That pretty much answers my question.It was only a hypothetical question really.
A company I know have two high value, high emission cars which they do an enormous amount of company miles in .
I can't really understand how or why they would do that!
Am I right in thinking you cannot have a 'pool car' if there is predominantly one person using it-even in the instance where it is genuinely pure business?
blindswelledrat said:
IanMorewood said:
My advice, if they genuinely will be pool cars then go ahead if on the other hand one director/employee may seem to have an unusually large use of the car then stick to company car rules. And yes the revenue are picky enough to do a stake out over a couple of pool cars if they think your defrauding them.
That pretty much answers my question.It was only a hypothetical question really.
A company I know have two high value, high emission cars which they do an enormous amount of company miles in .
I can't really understand how or why they would do that!
Am I right in thinking you cannot have a 'pool car' if there is predominantly one person using it-even in the instance where it is genuinely pure business?
I wonder if you could also argue that having an office at home constitutes a commute when you go home for the evening? Meals out to the pub become business meetings etc... Obviously you couldn't take the piss, but there must be some grounds for use of pool car other than from office to meetings.
blindswelledrat said:
Am I right in thinking you cannot have a 'pool car' if there is predominantly one person using it-even in the instance where it is genuinely pure business?
It doesn't even have to be a "pool" car. As long as it's only used for business use and the company makes it unavailable for private use then there's no benefit in kind tax to pay. There's quite a well known case - Elm Milk Ltd - where the Revenue lost a court case on this.blindswelledrat said:
AM I right in thinking that under no circumstances can you take it home- even if you were going to a meeting the following day, for example?
Nope - "incidental" use is OK. But you'd be on dodgy ground if you used the car to go out for the evening, although maybe you'd need to if you'd left your own car at work. Ideally, HMRC likes to see private use excluded from the insurance policy and written instructions that private use isn't allowed.If you're honest about these things then there shouldn't be a problem. If you take the mickey then you're asking for trouble.
Edited by Deva Link on Monday 26th January 17:05
Would re-iterate previous posts that pool cars must be used WHOLLY for business mileage and any private mileage as confirmed during HMRC enquiry for example can lead to a benefit in kind being assessed.
Having said this, if this it genuinely the case that the car is used 100% for business AND you have robust and valid mileage logs for pool cars then there is no reason that you can have such a company owned car without a benefit in kind being assessed. We have had several clients have PAYE inspections in recent years where records have been examined and accepted on this basis (no matter what the car). Not quite as clear cut with reclaiming the VAT back though as from memory it needs to only be 'available' for private use even if actually not used for HMRC to disallow the VAT reclaim - I vaguely remember people saying that business only use insurance could work here BUT the cost of this may in itself may prove prohibitive.
There is another famous case which from memory is vaguely relevant (although I think this relates to claiming VAT on the purchase of the car) and sticks in the mind for two reasons - one being the case name of Fagomatic and the second being the car involved which was a brand spanking new Lambo of some sort which he claimed to be a delivery vehicle for re-stocking cigarette vending machines in high end clubs!!
Having said this, if this it genuinely the case that the car is used 100% for business AND you have robust and valid mileage logs for pool cars then there is no reason that you can have such a company owned car without a benefit in kind being assessed. We have had several clients have PAYE inspections in recent years where records have been examined and accepted on this basis (no matter what the car). Not quite as clear cut with reclaiming the VAT back though as from memory it needs to only be 'available' for private use even if actually not used for HMRC to disallow the VAT reclaim - I vaguely remember people saying that business only use insurance could work here BUT the cost of this may in itself may prove prohibitive.
There is another famous case which from memory is vaguely relevant (although I think this relates to claiming VAT on the purchase of the car) and sticks in the mind for two reasons - one being the case name of Fagomatic and the second being the car involved which was a brand spanking new Lambo of some sort which he claimed to be a delivery vehicle for re-stocking cigarette vending machines in high end clubs!!
blindswelledrat said:
DO these raise a lot of eyebrows at the Inland Revenue?
Obiously a pool car avoids the associated company car taxes and are a massively exonimical way of owning an expensive car (provided you are comfortable being slightly less than honest as to thier use)
I suppose my question is: Do people regularly get away with this or is it completely unfeasible for some reason?
I know somebody that got caught playing this game. The end results were not funny.Obiously a pool car avoids the associated company car taxes and are a massively exonimical way of owning an expensive car (provided you are comfortable being slightly less than honest as to thier use)
I suppose my question is: Do people regularly get away with this or is it completely unfeasible for some reason?
Eric Mc said:
E36GUY said:
What if said pool car was all branded up and therefore still being used for business advertising even when being used as a non-work trip?
Useage is the key - not what it looks like.Eric Mc said:
E36GUY said:
What if said pool car was all branded up and therefore still being used for business advertising even when being used as a non-work trip?
Useage is the key - not what it looks like.On the subject of personal use, there is another fairly recent (last 10 years) case of a plumber (I believe) who claimed his van was a pool van. He did not have premises where he could park the van, so he drove it to a car park the other side of a river from his house, and then walked home. He didn't use the van for personal mileage otherwise.
HMRC argued that, since he was more-or-less commuting home, the van was being used for personal use. The commissioners found in his favour, however, since the van was not parked at the home address, was not used for non-business use, and was available for anybody in the company to drive (even though there was only one person in the company). So there is preceedent here.
Oh, one last thought. If the employee (genuinely) works from home, I believe parking the car at home should be OK, so long as mileage logs show only business use.
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