23 January 2019
Cars are, as you would expect, an extremely common benefit provided to employees in the automotive sector and it is important to ensure that they are provided in the best way possible.
The tax cost of company cars has been steadily rising and can lead to surprise liabilities if not carefully monitored and changes in vehicles notified to HMRC when required, and from a compliance perspective full records need to be maintained of what cars have been used by employees and over what periods.
The use of ‘averaging’ can ease the administrative burden if you operate a fleet with frequent changes, and employee car ownership (ECO) schemes are becoming more and more popular within the sector due to the unique options available to dealers and the significant tax savings attainable, so it’s a good time to review your arrangements.
In addition to the options for how cars are provided, it cannot be overstated how important fuel is.
Fuel benefit is typically inefficient, and in spite of some long-standing myths requires somebody to travel a lot of private miles before it makes sense due to the tax they pay compared to the cost of providing their own fuel.
In tandem with this point, it can be very easy to inadvertently be considered to be providing employees with fuel benefit if you are using fuel cards in your business. HMRC’s focus on the use of fuel in the automotive sector is something that has been discussed in our previous blog but is worth highlighting again. How robust are your systems?
If you would like to discuss the options available for the provision of company cars, or whether you are monitoring your use of fuel sufficiently, please contact me or a specialist in our automotive team.
