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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17145
Experience:  International tax
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can you help please looking for advice on company car tax as

Customer Question

can you help please
looking for advice on company car tax
as employed I have a company car and all fuel is paid and pay a lot of tax for this even though it is only used for company miles as iam a salesman
is there a better way whereby we can reduce the amount of tax we pay and or be sure we are paying the correct amount of tax
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
When a company car is made available for the private use of an employee a 'benefit in kind' value is calculated in relation to the car, and the fuel if that is also provided for private use.
The tax you pay is broadly determined by three factors:
the list price of the car plus any accessories
the CO2 emissions of the car, and
the fuel type of the car.
If the only journeys you are permitted to make in the car are work journeys – for example, making calls to customers – there
is no tax charge unless you actually use it for other, private
purposes as well.
Your employer must be able to show to HMRC that you don’t have
to pay tax. This means you could be asked to:
• keep mileage records
• sign an agreement about the use of the car
• have use of the car put into a contract of employment.

That then would reduce your tax. Of course if you do use it for personal the tax would apply.
Customer: replied 3 years ago.

thank you

the issue is that it is available for private use be it that I do not use it and I think if I ever go just to the office this is classed as private use.


I that case how can I be sure as it is at the moment I am paying the correct amount and is there any way of reducing it where by we pay the fuel and claim back for the work miles we do?

Expert:  TaxRobin replied 3 years ago.
Have your employer say it is not available for private use. You say you do not use it for private so make that a condition.
Keeping the log would be your best option. Yes ‘Private use’ includes employees’ journeys between home and work, unless they’re travelling to a temporary place of work.
In the case of Gilbert v Hemsley (55TC419), the taxpayer was an employee of a plant hire company. He was required to be on call at any time and was provided with a company car. He used this to travel between his home and the company's nearby business premises and for genuine business trips. He successfully argued before the Commissioners that:

he was prohibited from using the car privately
he never used the car for private motoring.

Now this employee was based from home so the travel to the business premises were not seen as personal. Do not know if that is an option for you but...
HMRC has a calculator (although there are numerous ones on the internet):

Copy and paste the above (the calculator will be at the bottom).

You have to pay tax on the fuel as a separate benefit. You may be able to get tax relief for business mileage when you use your own vehicle on business, or for fuel you buy when you use a company car.
If you don't have to fill in a tax return, you can get tax relief for your allowable expenses by:
filling in form P87 Tax relief for expenses of employment

Expert:  TaxRobin replied 3 years ago.
JACUSTOMER-qoy2k3dn- Last Viewed on 28/08/2014 at 13:05

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