A 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.
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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