February 16th, 2016

Pool cars – are you getting it right?

imageA recent tax case has emphasised how important it is to get it right when it comes to pool cars.

A ‘pool’ car means that the car isn’t taxed on an employee as a benefit in kind. So it would seem to be a good idea to say the car is a pool car – and avoid the tax.

The problem is that HMRC have strict requirements on what is, and isn’t, a pool car.

You must meet all the requirements completely.

They are:

1. The car cannot be ordinarily used by one employee to the exclusion of others. You can’t get away with just occasional use. It must be available and actually used by others frequently as part of their job.
2. Any private use must be incidental. This means infrequent – for example an unforeseen emergency. Here’s what HMRC say about it.
3. Not normally kept overnight at or near an employees home. It doesn’t matter that there may be no parking at the work place or that the car would be safer at the employees home. There’s more details here. Who said tax has to be fair?

Failing to get it right would lead to all the tax being due – plus interest and penalties.

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Cars Limited Companies

by
Managing Director

Jonathan trained as a chartered accountant with Price Waterhouse (now PWC) in Liverpool before becoming a small business services manager for Grant Thornton in Warrington. He also spent three years as the financial controller for Brookside and Hollyoaks (not that he ever mentions it!).

Jonathan is recognised as a specialist in the entertainment industry and is often called upon to provide training courses and seminars for media professionals. He's also a bit of a technology geek and has been recognised with the accountancy industry as one of the most progressive accountants in the UK.
Outside of work Jonathan is very proud to be the Treasurer of the Tim Parry Johnathan Ball Foundation for Peace and to be on the Council of the Liverpool Institute of Performing Arts (LIPA)

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