Company car tax for a permy question

[Jessica@WhiteFieldTax]

She's an employee, surely her tax affairs are down to her employer?

Unfortunately not, HMRC see it largely as the employees responsibility (IOW go and read our website), save the ability to recover tax from the employer if there are failures to operate PAYE procedures correctly.

AFAIR (but I haven't checked) the old P46car which the employer had to complete is now abolished, so its up to the employee to tell HMRC they have a car, PMI, whatever, in year so code can be adjusted. Otherwise its picked up via P11D at end of year, with attendant underpayment.

[Clare@InTouch]

AFAIR (but I haven't checked) the old P46car which the employer had to complete is now abolished, so its up to the employee to tell HMRC they have a car, PMI, whatever, in year so code can be adjusted. Otherwise its picked up via P11D at end of year, with attendant underpayment.

I thought so too, but couldn't find verification. Pretty sure I read in the Office of Tax Simplification's last report that one of their 42 "easy wins" was to bring it back.

[Craig at Nixon Williams]

AFAIR (but I haven't checked) the old P46car which the employer had to complete is now abolished, so its up to the employee to tell HMRC they have a car, PMI, whatever, in year so code can be adjusted. Otherwise its picked up via P11D at end of year, with attendant underpayment.

Just checked and the P46(car) is still on HMRC's website http://www.hmrc.gov.uk/forms/p46car.pdf - it says to use if from 6th April 2013 onwards...surely this should still be completed!

Craig

[Clare@InTouch]

Just checked and the P46(car) is still on HMRC's website http://www.hmrc.gov.uk/forms/p46car.pdf - it says to use if from 6th April 2013 onwards...surely this should still be completed!

Craig

Page 46 at the bottom here https://www.gov.uk/government/upload...rim_report.pdf

The form OTS want reintroduced is when you change a car rather than provide a new one. I'm sure I read something else, but can't find it for the life of me.....!

[ASB]

Oh! I remember many moons ago being told they were not the perk they used to be. My apologies.

Depends on a number of factors. But I take Cash of about 6k less 20% having engineered myself out of 40% tax by lots of pension through salary sacrifice. Gives me 400 a month to run a vehicle on. Since I run a crappy pug these days it's damn cheap.

I could take a half way decent car; the benefit tax on the sort of car I could take would be 1,110.

So I'd get a shinier car that I don't want at greater expense.

For me the choice is:-

25k car I don't own and never will.

Or £500 a month to run any old pile of junk I fancy.

The latter works for me.

Like doing a company yourself through YourCo whether it is worthwhile or not is dependant upon the individuals view etc.

[malvolio]

Unfortunately not, HMRC see it largely as the employees responsibility (IOW go and read our website), save the ability to recover tax from the employer if there are failures to operate PAYE procedures correctly.

AFAIR (but I haven't checked) the old P46car which the employer had to complete is now abolished, so its up to the employee to tell HMRC they have a car, PMI, whatever, in year so code can be adjusted. Otherwise its picked up via P11D at end of year, with attendant underpayment.

I actually appreciate and understand all that, but under the employer's duty of care they should either do the paperwork or at least tell their employees what needs to happen to keep their tax position straight if they haven't done it themselves. It's pretty clear they employer has done nothing other than hand over the keys.

[ELBBUBKUNPS]

Thanks for all the info, the company she works for is a very small firm and the accountant who does the payroll and works for them must be nearing late 80 years old now lol

So reading through the thread am I correct in saying,

1. Its now her responsibility to tell HMRC about the car and that the P46 form is no longer used by her employer unless she has a change of car ?

And final question,

2. The bit about HMRC finding out when they get the P11D, and then making her pay the following tax year, is the way she is supposed to do it, or should she be telling HMRC up front ? They know she had a car as they sent an under payment letter for 11-12 as well earlier in the year around Jan time, do you need to tell them every year ?

cheers peeps and hope everyone has a good weekend

[Taita]

Company cars are brilliant for a permie... Employer pays for the car/lease, tax, insurance, servicing etc. The employee pays a bit of tax on the BIK, the cost of which will be far less than the above.

Craig

Craig. Not every company offers a full fat deal. Some just supply the car leaving the rest to the employee to pay. This can be very expensive when the benefit in kind is taken into account. In some cases it is better to (if the employee can) take additional money as salary rather than have a company car. It is a long time since I saw an accountant regard his firm's car scheme as perk unless he was working for a car manufacturer/distributer with an HMRC exempt scheme.

[ELBBUBKUNPS]

Is it in section N? If so it's not actually taxable, it just needs to be claimed as an employment expense. That's usually done on a tax return, but you can make a claim if you don't file a return via a separate form: http://www.hmrc.gov.uk/forms/p87.pdf

The company should be paying mileage not petrol, then it wouldn't even touch the P11D.

Yes its mileage sorry not petrol, will look at the P11D this evening to see what it says.

Thanks

[Clare@InTouch]

Yes its mileage sorry not petrol, will look at the P11D this evening to see what it says.

Thanks

The only time mileage should be on a P11D is if it's paid in excess of the HMRC rates, so above 45p and 25p.