The following Employment Tax guidance note by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:
Company cars are one of the most common taxable benefits. In addition, they have quite a number of complex rules and onerous reporting requirements. Company cars are covered by very specific legislation.
Detailed guidance on each of the following sections to cover specific circumstances is available at Simon’s Taxes E4.625, from HMRC at EIM23000 and within HMRC’s 480: Expenses and benefits ― a tax guide .
If the employer provides a cash alternative to the provision of a company car, this is subject to tax and NIC in the same way as salary.
A taxable benefit arises on the provision of a company car by an employer to an employee or a member of his family or household (without the transfer of ownership), where that car is available for non-business use.
The car benefit charge is designed to cover all the running costs of the car, such as service, insurance, road tax and congestion charge, and even covers fixed penalty notices provided the notice is attached to the car. Therefore, these costs are not charged as benefits in their own right.
However, this exemption does not extend to the provision of a driver, which is subject to the rules in ITEPA 2003, ss 201–210.
For a taxable benefit to arise, the vehicle must be a car. A car is defined in ITEPA 2003, s 115 as a mechanically propelled vehicle
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