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bigduckontax
bigduckontax, Accountant
Category: Tax
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Im a Charity Trustee and do most of the work for the charity.

Customer Question

I'm a Charity Trustee and do most of the work for the charity. My board of trustees have bought a car for the charity work I do, my question is can I use the vehicle at all for private use , but will I have to pay 'Benefit in KInd tax' I am retired I do not receive any salary only allowable expenses, if I use the vehicle I will pay my own fuel at whatever else the trustees decide to contribute, However the Inland REvenue website doesn't seem, to deal with this situation and the kind of rates they determine would be too expensive for me as they base company cars on new vehicles the one we have is second hand and cost £5495 to buy. I did read on one page that employees earning under £8500 were excempt form BIK tax would that apply to me?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

I agree that the matter is highly complex, but that is to counter extensive tax avoidance or even evasion inherent in this area. Any private use of the vehicle would be indeed a benefit in kind and taxed accordingly. However, to be taxed the BIC plus your other income would be aggregated to give a total income figure upon which Income tax would be levied. You would, of course, be entitled to the normal personal allowances to offset against total income. Depending on the level of private usage viz a viz charity work usage HMRC may consider it to be too small to adjust and waive the benefit especially as their tables do not readily provide for such a low priced vehicle.

I would be inclined to consult your tax office for guidance in this matter. Not all HMRC staff are ogres and you may receive a favourable nod. The charity also has a duty here viz:

If you are a lower-paid employee, your employer should give you form P9D, or the same information, showing you any benefits in kind you receive. This can be used to determine the level of benefit for your pension credit. Of course if the car is provided only for the charity's use then no BIK is created.
Customer: replied 3 years ago.

Thank you Keith, I know its a complex question, to put you further in the picture, I don't receive a salary at all from the charity and I'm on basic pension topped up with Pension Credit, I will buy my own fuel and also something towards running costs of the vehicle, but their website doesn't answer my question I thought I saw a page which said the under £8500 applied to voluntary workers or those that ran a charity, but can't find that page again now, if you could answer more fully I would appreciate it, many thanks Roz

Expert:  bigduckontax replied 3 years ago.
Yes, I did hunt for that too, but without result. I will have another trawl and you may well be correct. The fact that you are fueling the car and paying towards it's running costs scarcely makes it a benefit in kind; effectively the charity is hiring it to you, a very different kettle of fish. I would suggest that in those circumstances it could not be construed as a BIC.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 2991
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 3 years ago.
Got it! There is a notice that a volunteer worker must be in receipt of the statutory minimum wage to have their benefits in kind taxed. I suspect that this is the rule across which you have stumbled. Thus as you receive no wages your`use of the charity's vehicle is not subject to tax. Please ignore my previous comment about approaching HMRC, there is no need. you are in the clear! I don't think the charity need to use the P9D procedure either.
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.
Customer: replied 3 years ago.

Brilliant Keith thank you, I knew I'd seen it somewhere, God bless you

Expert:  bigduckontax replied 3 years ago.
And a toast to the only man who got Christmas right, I give you Mr Eberneezer Scrooge!
Customer: replied 3 years ago.

Keith would you mind telling me how to find the page you found, so I can show it to the other trustees?

Expert:  bigduckontax replied 3 years ago.
It's a huge CAB site: Google 'benefits in kind for lower paid employees' and up will come the CAB site, amongst others.
Customer: replied 3 years ago.

Thank you very much, God bless

Expert:  bigduckontax replied 3 years ago.
Pleased to be of assistance.

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