Quizzes & Puzzles0 min ago
Income Tax and a company car.
9 Answers
At one time I had the use of a service van which was always kept at my home but each day I traveled, from home to a fixed location i.e. a control center. Although I was charged for private private mileage (evening and weekend use) I was also taxed because daily travel was regarded as a benefit-in-kind.
A relative has the offer of a job with a company car. The job is to provide a specialist service to individuals in their homes. This would entail the employee working from home and travelling to a different locations as required. It is known that the company would make a charge to the employee for any private mileage. As of yet the details of the car are not known, but Ignoring the size of the car and any other technical details, how is the benefit-in-kind calculated for the an employee who works from home and which is clearly different to the way in which I used a company vehicle and was taxed on its use?
A relative has the offer of a job with a company car. The job is to provide a specialist service to individuals in their homes. This would entail the employee working from home and travelling to a different locations as required. It is known that the company would make a charge to the employee for any private mileage. As of yet the details of the car are not known, but Ignoring the size of the car and any other technical details, how is the benefit-in-kind calculated for the an employee who works from home and which is clearly different to the way in which I used a company vehicle and was taxed on its use?
Answers
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If his home is classed as his main work address then any journey to an indiviual should be classed as work and not reclaimable by the company as private. If they class head office as his main work address then they "could" claim that he can only claim the difference in mileage if its great than the normal comute to office
eg , if its 10 miles to head office and his...
eg , if its 10 miles to head office and his...
12:19 Fri 22nd Jun 2012
To and from a fixed place of work (ie your control centre) is taxable as we all have to get to work at our own expense. If your relative is 'working from home' that in effect is their fixed place of work, that is their starting point as they will be asked to go to different locations as you say. Therefore all the miles from home will be business. A bit like being a sales rep who goes to visit customers everyday rather than going to an office everyday then on to visit customers (going to the office would be private miles in that case). I hope this makes sense - i know what i mean but finding it difficult to explain! Another example would be someone on call to carry out repairs as and when needed at various locations, they are often based at home, therefore all miles to working site being business miles.
BIK isn't calculated on journeys or how its used, its the P11d value of the car and the emissions
as long as they take the car home every night and have private use they will pay co car tax. if they have a fuel card they will pay extra tax for this benefit
it sounds to me as if you're a little confused here. is the eployer paying fro fuel and then clainign the private mileage back and you are trying to finf out if the work journey's will be classed as work or comute?
as long as they take the car home every night and have private use they will pay co car tax. if they have a fuel card they will pay extra tax for this benefit
it sounds to me as if you're a little confused here. is the eployer paying fro fuel and then clainign the private mileage back and you are trying to finf out if the work journey's will be classed as work or comute?
If his home is classed as his main work address then any journey to an indiviual should be classed as work and not reclaimable by the company as private. If they class head office as his main work address then they "could" claim that he can only claim the difference in mileage if its great than the normal comute to office
eg , if its 10 miles to head office and his appointment is 16 miles away he could only claim 6 miles each way as business and they could claim 10 miles each way as private
So depends on co policy with that, they really need that claifying
eg , if its 10 miles to head office and his appointment is 16 miles away he could only claim 6 miles each way as business and they could claim 10 miles each way as private
So depends on co policy with that, they really need that claifying
Hi Mccfluff. Thank you. The actual details of who pays what and the car details are yet to be confirmed. It is accepted that having a car will incur a tax liability. My concern was trying to compare my experience with a company vehicle in which I commuted daily to work and then started my rounds. The job on offer is definitely working from home and not to a head office which is some hundred miles from their home. I assume at some point there would be a need to visit the office, because of the distance from home how do you think this would be regarded?
Thank you as that has clarified the matter.
Thank you as that has clarified the matter.
He needs to make sure his contract states that his home address is his main place of work, then any business travel is just that business travel so he should be able to claim expenses for each journey
HMRC advises
Business travel and private use
11.25 'Business travel' means travel for which expenses would qualify for deduction if they were incurred
by the employee. Broadly, this means travelling expenses which involve two types of business
journey:
• journeys which employees have to make in the performance of their duties, and
• journeys which employees make, to or from a place they have to attend, in the performance
of their duties - but not journeys which are ordinary commuting or private travel.
Detailed guidance on the types of journey which give rise to qualifying travelling expenses is
contained in booklet 490 Employee travel - A tax and NICs guide for employers.
Section 118(2) 11.26 'Private use' means any use other than for the employee’s business travel. This therefore includes
commuting journeys.
Companies do have their own policies though so he needs to check with them and ask for a copy of the fleet policy and the expenses and benefit policy
this is a link to the HRMC expenses
http://www.hmrc.gov.uk/guidance/480.pdf
This is our co policy
Business mileage is defined as the distance travelled from the normal place of employment (e.g. the office) to the business destination. If the journey starts/finishes at a different location (e.g. home) then it will be the lesser of:
a) the distance actually travelled
and
b) the distance that would have been travelled had the journey started or ended at the normal place of work
HMRC advises
Business travel and private use
11.25 'Business travel' means travel for which expenses would qualify for deduction if they were incurred
by the employee. Broadly, this means travelling expenses which involve two types of business
journey:
• journeys which employees have to make in the performance of their duties, and
• journeys which employees make, to or from a place they have to attend, in the performance
of their duties - but not journeys which are ordinary commuting or private travel.
Detailed guidance on the types of journey which give rise to qualifying travelling expenses is
contained in booklet 490 Employee travel - A tax and NICs guide for employers.
Section 118(2) 11.26 'Private use' means any use other than for the employee’s business travel. This therefore includes
commuting journeys.
Companies do have their own policies though so he needs to check with them and ask for a copy of the fleet policy and the expenses and benefit policy
this is a link to the HRMC expenses
http://www.hmrc.gov.uk/guidance/480.pdf
This is our co policy
Business mileage is defined as the distance travelled from the normal place of employment (e.g. the office) to the business destination. If the journey starts/finishes at a different location (e.g. home) then it will be the lesser of:
a) the distance actually travelled
and
b) the distance that would have been travelled had the journey started or ended at the normal place of work
But, irrespective of the issue of travelling to/from work, if he has access to the car outside working hours for private use it is seen as a taxable benefit and tax will be levied based on HMRC's published company car tax rates. He can offset any repayments made for private mileage against his tax liability
I think that OP needs to understand that the BIK rules for vans (his experience) differ from the rules that apply to cars (relative's experience). For the car, there are two potential benefit charges: The car benefit, which he could not escape otherwise than by making a capital contribution, and the fuel benefit. The car benefit will be at a scale rate based on the CO2 emissions and cost of car. Actual usage of the car and location of base of operations will be completely irrelevant for that purpose. These issues would however be relevant in identifying business miles v commuting journeys in the event that there is an intent to escape the fuel benefit by way of having the employee fund all private fuel costs.
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