Reply to: Company car tax for a permy question

[ELBBUBKUNPS]

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.

Thanks, I went through all the paperwork at weekend, her employer had messed up and put the mileage allowance as a BIK plus other things that shouldnt be there, they made the same mistake for last 4 years and she had paid tax on the incorrect BIK so a nice tax refund is due to her .

Managed to figure out to what was happening with the car to, was a mess though.

[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.

[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

[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]

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

[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.

[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.

[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.....!

[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]

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.

[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.

[TheFaQQer]

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

Until the employee gets made redundant and finds that they now have to take on the lease themselves.

[northernladuk]

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

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

[Craig at Nixon Williams]

Any chance of her getting cash rather than a car if it is a small company? I believe the days that company cars were good perks were long gone and don't suit everyone anymore? Get the cash and buy your own if you are not bothered about a new one? Makes it easier for the company to manage as well?

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

[northernladuk]

Any chance of her getting cash rather than a car if it is a small company? I believe the days that company cars were good perks were long gone and don't suit everyone anymore? Get the cash and buy your own if you are not bothered about a new one? Makes it easier for the company to manage as well?