Fully expensed company vehicle

[monkeydile]

Good afternoon, im trying to find out how to account for a company car in a certain way but have had no joy on the HMRC website nor when I rang them. I've been advised this forum is a friendly knowledgeful place so here goes.

If I wanted to employ someone and offer them a company car and fuel card BUT I dont want the employee to get taxed (the company would foot the bill) how do I go about it ?

I cant put the info on a P11d as the employees tax will be effected, i've tried numerous times to find the correct way to account for this but sadly im getting no joy

Thanks in advance

 

[drounding]

The employee must get taxed on the BIK. The company could though perhaps up the basic salary to compensate so the net pay remains the same.

 

[robindunne]

The employee will suffer tax on the BIK calculated as the list price multiplied by a percentage based on the emissions of the car. The BIK for the fuel is also an amount (can't remember off the top of my head) based on the same percentage.

The only way round it is to get a car with zero emissions - so unless they fancy driving an electric car you won't have any luck.

There is also the employers NI cost that will be suffered by the business.

Not all bad news though as the cost of buying (Capital Allowances permitting) and running the car are deductible for CT purposes.

 

[robindunne]

There will also be Tax Credit implications if they're claiming.