Company Car ?

Surely all the employee needs to do is ask the employer to forbid him to use the car privately, and put this in writing?

That's all very well in a "normal" employer/employee relationship.

It's a bit more tricky with single-person companies, where the employee "is", in a sense, also the employer, and can rescind and reinstate permission at will. It would be quite handy if permission could be given (and availability hence established) for part of the year, and accordingly for the BIK charge to apply pro rata by time. Don't know whether that works, though.

Yes but as an employee with a van I now have the opportunity to declare 'insignificant private usage' with the company and IR.

I did not have this option with the car, as it was 'available for private use' even tho' it was only used for business.

I've always had my own car for private use as I couldn't be bothered to get all the gear out every time I wanted to use it for the family and dog.

Chris

Hmm, you do realise that you are giving *them* ideas, dont you?

"Ronald Raygun" wrote

Well how on earth did it get past Parliament?

I think they got that idea quite some time ago. I got a company car in

This was unfair in 2 respects. If I had bought my own car it would not have been a brand new Ford Cortina estate (needed to deliver my employer's products) it would have been something much less costly, and before the latest set of rules the car was taxed at 25% of it's value for the first four years, by which time the employee had paid tax on 100% of it's value, in subsequent years they continued to tax the vehicle (at a lower rate) so the tax was ultimately over 100%.

DG

Real Ale wrote

I never had a company car, but always thought the system was unfair to those who actually needed one. It used to piss me off when our managers came to work in a colleague's shared car while their wife swanned around in their company cars, and they got mileage for it! I did insist on borrowing HIS company car when I had to carry stuff between work premises, rather than using my own car. I had the pleasure of reversing it into a concrete post on one occasion, soon after he was allocated a new one. Bloody automatics! Oh, the fuss he made about it. ;-)

The simple answer is because it's in the finance act.

The complicated answer is that after years of people taking the p with exceptions, parliament realised that they had no choice but to wield the big stick

tim

"tim (moved to sweden)" wrote

And so tax something that isn't a benefit? [Company car that is "available" but *never* used privately.]

Where will they go next?

being given a company car that you drive home in each day is a benefit.

I don't believe that anyone would have a company car parked outside their house each day that they never use, and neither did the revenue

tim

Having access to a car *is* a benefit. Actually using that car is an *additional* benefit.

If there's a chance you might use it, even if you didn't really plan it from the outset, then one measure of the benefit of its mere availability is that it will be cheaper to use it, even if you have to pay mileage rates to the employer who owns it, than to take a taxi.

If you really, really, never ever want to use it, then it can (or should) be a simple matter to make it "unavailable".

I'm sure soon employers will provide more vans including pickups for their employees since the home to work journey in a "van" is no longer a taxable benefit. However for this zero taxable benefit, even beyond 2007, they must not be used for any further private use.

"Ronald Raygun" wrote

The second "benefit" you describe above obviously does have a value. However, the first "benefit" you describe has *no* value whatsoever UNLESS you take advantage of the second "benefit". In which case, really, the value is still only within the second "benefit" and the first "benefit" still has no value.

When a "benefit" has *no* value, why should it be taxed as though it did have a value?

"Ronald Raygun" wrote

Nope, that is simply a measure of the second benefit -- *not* the first!!

"Ronald Raygun" wrote

You said earlier that when running a company from home, it is not possible to make the company car "unavailable"...

"tim (moved to sweden)" wrote

What if you *don't* drive it home each day? You work from home, and only drive it for work purposes...

"tim (moved to sweden)" wrote

So where is the person who works from home meant to park the company car (which they only use for work purposes) ?

That's not true. Having access has a benefit not only if you *do* use it, but also if you *might* use it. This is similar to the benefit you get from carrying a can of pepper spray or a gun. Even if you never actually deploy them, they still make you feel safe.

It shouldn't, but it is deemed to have, so it is.

Untrue. The benefit of using the car is the same as that of using the taxi. But the cost of the taxi is high relative to the cost of using the car, but this saving is only possible if the car is available, hence the first benefit has the value of making it possible to make use of the second benefit, and of saving taxi money and the hassle of calling and waiting for the taxi.

Of course you have to factor in the cost of making the car available. The cost of the second benefit is only several pence per mile, that of the first several hundred pounds a year. I say that if you want to avoid the cost, you need to have the right to reject the first benefit.

Did I? I hope you've committed an error of identity. I don't think it is impossible, but it might be difficult convincingly so to argue, if you have the power to make it available and unavailable at will (i.e. if it's a company you control).

Really? Is that not only in circumstances where there are genuine business reasons why the van cannot be kept at or near work? I can see it coming that if this concession is widely abused, it will be withdrawn, since the basic rule that commuting does not qualify as business travel has not changed.

"Ronald Raygun" wrote

I don't agree. If you "might" use it, but actually don't end up using it - then how have you benefited? Have you saved any money? No!

"Ronald Raygun" wrote

In a similar way, the only benefit you get from availability of the car is a warm feeling inside that you *could* use it if you wanted to. That has no *monetary* value!

"Ronald Raygun" wrote

That's my argument - we have something here which is deemed to have a value when actually it doesn't; what other things will they also try to "deem" having a value which don't?! :-(

"Ronald Raygun" wrote

Ah, but also the monetary benefit of "availability" is only worth anything *if* the car is actually used!!

Think of it this way - what monetary value is the first benefit (of "availability") actually worth, if the second benefit (of "use") is not taken? It hasn't saved you any taxi fares, has it?!

"Ronald Raygun" wrote

It costs an employer a fair amount to set up the system of being able to offer a cheap mortgage loan to employees. So if the "cost" matters at all, as you suggest above, then employees who don't take a cheap mortgage should also be taxed for the "availability" of it.

So if your argument is valid, then why the descrepancy between the two Benefit-In-Kinds?

I just simply cannot believe that someone would have a company car parked up outside their house each day and never use it for personal trips. (and neither do the IR)

tim

"tim (moved to sweden)" wrote

Do you (and HMRC) believe the same for the company computer? For the business stationery? For every other company asset & expense?

What is so special about a car that everyone *must* use it privately, but not anything else?