Proving car exclusively for business use?

I used to work for the Revenue as an Inspector some years ago, and I never came across a case where anyone managed to persuade them that there was no private use whatever. I suggest that your best course is to try and agree a realistic minimum private use, and move on.

The tax effect is crippling even using minimal private use.

IIRC it was achieved in rare cases but the circumstances were pretty extreme. And I'd expect HMRC to still have the precedent papers in a locked filing cabinet stuck in a disused lavatory with a sign on the door saying "Beware of The Leopard".

Can the OP confirm that when he says "the car will be parked at the employee premises" he means where the employee lives? If so the first one big hurdle, IIRC, is proving that the employee has no permanent workplace (or none he visits in the car). Otherwise there'll be use of the car for ordinary commuting which is private use of the car = bang to rights 'guv.

Someone who works from home?

It doesn't work that way

as soon as there is a single mile of private use you pay the full tax charge for "private use".

tim

Yep. But better if it is someone whose home is the *only* normal place of work. So eg the OP needs to watch the position of eg the London base. Will the sales person visit London regularly/routinely? If so, will the car be available for that travel? Ditto for any regional office etc. I've wandered over to the EIM and

But I'd have thought it was still worth the employer running the arrangement past the employer's PAYE office (or whatever they are called these days) before putting (or not putting in!) the first P11D.

Agreed. HMRC has always emphasised the need to avoid any "availability" for private use in order to ensure no taxable benefit arises.

But the OP's proposals seem to cover that fairly exhaustively (though I hadn't imagined it was possible to get business-only insurance cover).

That said, I think the proposal is silly. I'd be inclined to make it a requirement for the salesman to provide a suitable car (as approved by the employer), and then pay a car allowance (taxable) plus mileage at 40p/25p (non taxable).

The clever bit is to tweak the car allowance regularly (eg quarterly), such that on a cumulative basis it covers those (agreed) fixed costs which the "mileage payments minus variable costs/mile" don't cover.

Agreed. HMRC has always emphasised the need to avoid any "availability" for private use in order to ensure no taxable benefit arises.

But the OP's proposals seem to cover that fairly exhaustively (though I hadn't imagined it was possible to get business-only insurance cover).

That said, I think the proposal is silly. I'd be inclined to make it a requirement for the salesman to provide a suitable car (as approved by the employer), and then pay a car allowance (taxable) plus mileage at 40p/25p (non taxable).

The clever bit is to tweak the car allowance regularly (eg quarterly), such that on a cumulative basis it covers those (agreed) fixed costs which the "mileage payments minus variable costs/mile" don't cover.

Agreed. HMRC has always emphasised the need to avoid any "availability" for private use in order to ensure no taxable benefit arises.

But the OP's proposals seem to cover that fairly exhaustively (though I hadn't imagined it was possible to get business-only insurance cover).

That said, I think the proposal is silly. I'd be inclined to make it a requirement for the salesman to provide a suitable car (as approved by the employer), and then pay a car allowance (taxable) plus mileage at 40p/25p (non taxable).

The clever bit is to tweak the car allowance regularly (eg quarterly), such that on a cumulative basis it covers those (agreed) fixed costs which the "mileage payments minus variable costs/mile" don't cover.

Oh bu**er - what happened there...? Humble apologies.

Agreed. But suppose the salesman can't afford to buy a suitable car, and has insufficient good credit with which to raise a loan in his own name. Could the employer lend him the money without it counting as a taxable benefit (other than, of course, to the extent that the salesman doesn't pay the employer a market rate of interest for the loan)?

If a loan as above has been given, the allowance should also cover the agreed proportion of the capital repayments.

Good point. (I assume this is still much more tax- and NIC-efficient for most high-mileage drivers than the CO2-biased company car charges.)

But then again, might the company car proposal be designed to get the salesperson to accept the tracking device, so the employer then gets (purely as a side effect you understand) the ability to monitor just where the employee goes and when? If not, I offer it as a "cunning plan"; and only ask in return where can I collect my giant turnip?

Nice to see old habits like submission in triplicate are not totally gone :))

In that case, I wouldn't want to employ him. A good salesman, to be trusted to work a territory remotely (Scotland to boot...;-) ) would surely be credit-worthy?

No.

No - that's only applies for MPs expenses.

The interest (and depreciation) would be part of the fixed costs, used to calculate the allowance.

I've not done the sums but, like you, I assume it is.

Good one. Not thought of that. I'm sorry, we carved a hideous face on our last remaining turnip on Saturday, under the misapprehension it was a pumpkin......

Tee hee.

Actually, it wasn't me - it was either the 'pooter, OE (yes, I know that's very last century), or the ISP.

Perhaps, perhaps not. A good salesman is measured by results, not creditworthiness.

Why not? And specifically, how exactly would it be assessed? As a salary advance?

Would it be an easier "sell" if the salesperson was given a small van instead of a car? Maybe having a logo on the side would help the case.

Precisely. But if he has got the results (refer to his cv) surely he would be creditworthy?

Cos a loan to an employee is a taxable benefit.

As a taxable benefit ("beneficial loan") - unless As a salary advance?

No - that's a loan too.

You said yourself that this isn't always the case.

tim

Because of abuse like this the rules about vans are being equalised towards cars

tim