Quizzes & Puzzles7 mins ago
Car ownership
My employer bought my company car in my name and i have always been the only registered keeper. They verbally gave me the car on becoming redundant. The company is now in the hands of the administrator who now want payment for the car. I have sold the car prior to contact from the administrator. What can i do?
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if you were made redundant prior to their insolvency do you have any evidende you were given the car as part of your redundancy package? if so send it to the administrator (keep a copy for yourself).
If you do not have any evidence speak to the person that gave you the car so he/she can verify your story to the administrator.
If you do not have any evidence speak to the person that gave you the car so he/she can verify your story to the administrator.
On the face of it, I can understand why the administrator is suspicious.
You owned a car, which your employer bought from you for a sum of money and promptly then it gave it back to you for nothing? One inevitably wonders why it would do that, unless it was to avoid some other payment.
Is there anything else about the circumstances you can tell us?
Is this gift in lieu of a payment under the redundancy legislation?
How long in time between the transfer of car from you to company, from company back to you, and then date of administrators being called in?
You owned a car, which your employer bought from you for a sum of money and promptly then it gave it back to you for nothing? One inevitably wonders why it would do that, unless it was to avoid some other payment.
Is there anything else about the circumstances you can tell us?
Is this gift in lieu of a payment under the redundancy legislation?
How long in time between the transfer of car from you to company, from company back to you, and then date of administrators being called in?
If you have nothing in writing confirming that the car is yours (& the V5 does not do this) then you have a problem. As already suggested, you need to contact whoever it was in the company who gave you the car and ask them to confirm in writing to you & the administrator that it is your car.
If that is the case, there may well be tax implications (e.g. was the car in substitution for pay?).
If that is the case, there may well be tax implications (e.g. was the car in substitution for pay?).
I reckon the tax code situation helps your case and may be the clincher (others may not agree - please comment).
If it was a company-owned vehicle provided for your personal use (as well as business use), your P11D entries each year will show the taxable value as defined by HMRC, and this either reduces your tax code or results in a 'taxable pay' entry when HMRC assess your annual liability under PAYE. It will occur each year since 2006.
If your employer gave you the car, it would have had to declare a one-off taxable payment to you in the financial year 2006-7, of the total capital value of the car - and this would have been shown in your P11D for that year alone.
Assuming the latter scenario, you could be home and dry - but does the second scenario apply?
If it wasn't I don't see how you can claim you own the car under the above idea - and indeed if you've been paying tax on the assessed value (the first scenario), you will still have a tax liability if you are eventually successful in your ownership claim.
If it was a company-owned vehicle provided for your personal use (as well as business use), your P11D entries each year will show the taxable value as defined by HMRC, and this either reduces your tax code or results in a 'taxable pay' entry when HMRC assess your annual liability under PAYE. It will occur each year since 2006.
If your employer gave you the car, it would have had to declare a one-off taxable payment to you in the financial year 2006-7, of the total capital value of the car - and this would have been shown in your P11D for that year alone.
Assuming the latter scenario, you could be home and dry - but does the second scenario apply?
If it wasn't I don't see how you can claim you own the car under the above idea - and indeed if you've been paying tax on the assessed value (the first scenario), you will still have a tax liability if you are eventually successful in your ownership claim.
There's another aspect to my scenarios above - the rate at which you have been allowed to claim mileage for business miles.
If your employer gave you the car (and you paid tax on the total value in one lump), you would then have been able to claim business miles at 40p for the first 10000, 25p after that (and most employers fork out that sum).
If it is a company car, all you are entitled you is the money for petrol - typically around 12p per mile.
And another thing - on whose insurance policy has this vehicle been run on?
If your employer gave you the car (and you paid tax on the total value in one lump), you would then have been able to claim business miles at 40p for the first 10000, 25p after that (and most employers fork out that sum).
If it is a company car, all you are entitled you is the money for petrol - typically around 12p per mile.
And another thing - on whose insurance policy has this vehicle been run on?
The P11D is the annual declaration by your employer if it has provided you as an employee with taxable benefits. If you weren't provided with a P11D, then almost certainly no declaration was made to HMRC because it is the employer's job to give you a copy if any declaration was made. Thus your employer was presumably asserting that you had no taxable benefit.
However this doesn't fit your claim that you own the car - because the employer paid for the insurance and servicing and these are taxable perks (if you owned the car). An employer simply can't pick and choose what it pays for and what it doesn't - it has to stick to the published guidelines by HMRC on limits for taxable perks, or have a dispensation from HMRC to enable it to do something different.
This is a messy situation and one in which I reckon your former employer was providing you with a taxable benefit without declaring it properly to the HMRC. It is kind of irrelevant now because the employer is in receivership anyway, but unfortunately it doesn't help with your case for claiming you own the car.
Best not to even mention the subject to the receiver - it will presumably hinder your claim of ownership if you weren't paying for insurance and servicing of the vehicle in your own name.
However this doesn't fit your claim that you own the car - because the employer paid for the insurance and servicing and these are taxable perks (if you owned the car). An employer simply can't pick and choose what it pays for and what it doesn't - it has to stick to the published guidelines by HMRC on limits for taxable perks, or have a dispensation from HMRC to enable it to do something different.
This is a messy situation and one in which I reckon your former employer was providing you with a taxable benefit without declaring it properly to the HMRC. It is kind of irrelevant now because the employer is in receivership anyway, but unfortunately it doesn't help with your case for claiming you own the car.
Best not to even mention the subject to the receiver - it will presumably hinder your claim of ownership if you weren't paying for insurance and servicing of the vehicle in your own name.
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