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

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Director

John manages a wide portfolio of owner managed businesses and oversees the smooth operation of the firm’s payroll department.

After obtaining his degree in mathematics from the University of Liverpool, John joined Jonathan Ford & Co in 2004 and qualified as a chartered accountant four years later. John likes to keep abreast of developments in tax and accounting and is responsible for the mentoring of junior staff.

Outside of work, John enjoys keeping fit and is a Liverpool FC season ticket holder.

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