Yes I have searched and read the forums relating to company cars - yes I know the general rule is just don't do it - it is better to have a private car and charge the mileage (45p etc).
Reading the 2013 edition of HMRC 480 guidance http://www.hmrc.gov.uk/guidance/480.pdf there is a new section in Chapter 12 relating to calculating the BIK, specifically relating to re-imbursing for private use.
"Method of calculation
12.2
Car benefit is calculated in a series of numbered steps (more details start at
the paragraphs given):
1 Find the price of the car (paragraph 12.4)
2 Add the price of any accessories which fall to be taken into account
(paragraph 12.8)
3 Make any required deductions for capital contributions by the employee
(paragraph 12.16)
4 Find the appropriate percentage for the car (paragraph 12.22)
5 Multiply the figure at Step 3 by the appropriate percentage at Step 4
(paragraph 12.32)
6 Make any required deduction for periods when the car was unavailable
(paragraph 12.35)
7 Make any required adjustment where the car is shared (paragraph 12.37)
8 Make any required deduction for payments by the employee for private use
of the car (paragraph 12.38).
This method of calculation is modified in the case of classic cars (those 15
years of age or more; Steps 1 to 3, see paragraph 12.18).
There are special rules for disabled drivers affecting Step 1 (paragraph 12.7),
Step 2 (paragraph 12.15) and Step 4 (paragraph 12.31)."
and
"Step 8: Reductions for private use
12.38
Payments that an employee makes for the private use of the car are deducted
from the figure carried forward from Step 7 and can reduce the benefit
charge to nil.
To qualify as a deduction:
• there must be a requirement in the year to make payments as a condition of
the car being available for private use, and
• the payments must be specifically for that private use. Payments for
supplies of services, such as petrol or insurance, do not count.
Any payments which the employee makes specifically for the private use of
a replacement car as described in paragraph 12.36 are allowed as though
they were payments for the private use of the normal car in that period."
It seems that this new rule is better than the "car is on the drive so must be available" rule.
So my question is - has anyone taken a company car and started re-imbursing so as to reduce BIK to nil - this seems to work easily if you are attending a temporary place of work (as defined in 490.pdf)?
If anyone is doing this what calculation is being used to work out how much to re-imburse the company - are you paying back at 45p per mile?
TIA
Reading the 2013 edition of HMRC 480 guidance http://www.hmrc.gov.uk/guidance/480.pdf there is a new section in Chapter 12 relating to calculating the BIK, specifically relating to re-imbursing for private use.
"Method of calculation
12.2
Car benefit is calculated in a series of numbered steps (more details start at
the paragraphs given):
1 Find the price of the car (paragraph 12.4)
2 Add the price of any accessories which fall to be taken into account
(paragraph 12.8)
3 Make any required deductions for capital contributions by the employee
(paragraph 12.16)
4 Find the appropriate percentage for the car (paragraph 12.22)
5 Multiply the figure at Step 3 by the appropriate percentage at Step 4
(paragraph 12.32)
6 Make any required deduction for periods when the car was unavailable
(paragraph 12.35)
7 Make any required adjustment where the car is shared (paragraph 12.37)
8 Make any required deduction for payments by the employee for private use
of the car (paragraph 12.38).
This method of calculation is modified in the case of classic cars (those 15
years of age or more; Steps 1 to 3, see paragraph 12.18).
There are special rules for disabled drivers affecting Step 1 (paragraph 12.7),
Step 2 (paragraph 12.15) and Step 4 (paragraph 12.31)."
and
"Step 8: Reductions for private use
12.38
Payments that an employee makes for the private use of the car are deducted
from the figure carried forward from Step 7 and can reduce the benefit
charge to nil.
To qualify as a deduction:
• there must be a requirement in the year to make payments as a condition of
the car being available for private use, and
• the payments must be specifically for that private use. Payments for
supplies of services, such as petrol or insurance, do not count.
Any payments which the employee makes specifically for the private use of
a replacement car as described in paragraph 12.36 are allowed as though
they were payments for the private use of the normal car in that period."
It seems that this new rule is better than the "car is on the drive so must be available" rule.
So my question is - has anyone taken a company car and started re-imbursing so as to reduce BIK to nil - this seems to work easily if you are attending a temporary place of work (as defined in 490.pdf)?
If anyone is doing this what calculation is being used to work out how much to re-imburse the company - are you paying back at 45p per mile?
TIA
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