Within businesses, there is often confusion between a pool vehicle and a company vehicle. Pool vehicles are exempt from a benefit-in-kind charge provided certain conditions are met.
Company vehicles are taxable. It is vital to categorise your vehicles correctly and maintain records as evidence.
Stockport based Hallidays investigates and explains further:
A pool vehicle is exempt from the benefit-in-kind regime if all these requirements are met:
• The vehicle should be made available to more than one employee and should also be used by more than one employee
• The vehicle should be made available to each of the employees by reason of their employment.
• The vehicle should not ordinarily be used by one person to the exclusion of others, which is an additional requirement to the first point above.
• Any private use of the vehicle should be incidental. Although there is no rule in the tax legislation on how much private use is incidental, it will be necessary to examine each case on its facts.
• The vehicle should not normally be kept at or near the home of an employee overnight. It should usually be kept at the company premises overnight.
If all these requirements are not met then the vehicle may be classified as a company vehicle and liable for tax.
Hallidays recommends if you have pool vehicles you should maintain records to evidence how they are used within your business or organisation. These should include:
• The names of the employees who use the vehicle
• The times & dates the vehicle was taken & returned to the business
• The nature of the trip
• The number of miles travelled
Ensure you keep copies of relevant car insurance policies. These are often reviewed by HMRC as evidence of who has access to drive a motor vehicle.
This article – Expert Opinion – was provided by Hallidays who recommend that expert advice should be sought in all areas of tax in business.