Warning: HMRC to investigate Company Car and Courtesy Car Taxation and Employee use of Demonstrator vehicles

legal updates

Even if an employee borrows a luxury vehicle just for a weekend, this must be correctly recorded.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

It has been brought to light this week that HMRC will be launching an investigation to ensure that employees are paying the correct amout of Benefit in Kind tax (BiC) on company cars that they use.

If employees are using demonstrator vehicles or courtesy vehicles as a company vehicle, and therefore changing them on a regular basis, you must ensure that their usage of each vehicle is logged correctly and also the correct tax banding given to each period of usage.

This can either be done manually or through use of accountancy software, but the employer must make sure their records are clear and up to date, in order that tax can be calculated correctly. Even if an employee borrows a luxury vehicle just for a weekend, this must be correctly recorded, as that vehicle will carry a higher tax band than their usual vehicle and as such must be accounted for.  

HMRC are looking to commence investigations as soon as possible and therefore we advise dealers look at their recording procedures as soon as possible.

Connected Car FinanceReady to take the connected approach?

We’re here to ensure all used car dealerships deliver a better car finance experience for their customers. With over 4,000 approved dealer partners we ensure you are properly supported and connected with a range of flexible finance options, allowing you to lend and your customers to buy in complete confidence.

Related Legal Updates

Reductions in Business Rates

Companies are likely to be approaching you already knowing that you are entitled to this saving.

Online sales tax (OST)

With different interpretations of distance sales being bandied about, it is hard to see if and how OST will ever get implemented.

Entertaining can be Taxing!

Money spent entertaining employees IS tax deductable.

High value motor dealers – beware!

Not all businesses that receive payments worth €15,000 or more need to register as High Value Dealers.

Real Time Reporting – Are you ready?

Real Time Information (RTI) will come into force from April 2013 as a method of reporting figures online direct to HMRC.

Making a Living on eBay and Amazon? New Taxation Rules to be introduced

HMRC have ordered eBay and Amazon to release the details of substantial online sellers.

Is there no safe haven for offshore bank accounts

Currently HMRC have 70,000 cases of suspected tax loss involving UK based individuals arising from earlier bank information notices.

Get in touch

Complete the form to get in touch or via our details below:

01480 455500

Vinpenta House
High Causeway

By submitting this quote you agree to our Terms & Conditions and Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.