Company vehicle HMRC

[gazdkw82]

May have the opportunity of a company vehicle which can be used for private use.

I was informed the HMRC will tax for the use.

How does that work? Is it a 1 time cost per year? Is it a set value?

 

[pc1966]

It comes under "benefits in kind" but I don't know the details - you really need to ask an accountant if it is just you

Or the company you work for will (or should) sort it out so it is all covered by your PAYE deductions. But check they do, as you don't really want HMRC on your tail in a year's time asking for back tax.

 

[snowhead]

If it's a car it's a sum based on the value of the car or it may be emmissions as well nowadays.
If it's a van it's a fixed sum.
Plus if you get to use company provided fuel there's fixed sum added for that.
Re the fuel, if the company charge you per mile then there's no additional fuel charge.

The total of the sums is ADDED to your Wage / Salary and then taxed the same as the rest of your income.
If you're anywhere near paying higher rate tax (40%) then the extra added for a vehicle can push your total earnings over into that tax band, so you'd be paying tax at 40% on the benefit of the vehicle.

It's added for as long as you have use of the vehicle.

The company declare you have use of it yearly, but you have to keep an eye on it, I've been taxed for 2 vehicles at the same time when I've had a new or rpelacement one, as the company forgot to cancel the old one.
I was even paying tax on a van after I'd retired.

It all gets sorted by HMRC reasonably easilly online nowadays.

Rates for Van and fuel,
£3490 + £666 = £4156 x 20% = £831.20 is what it will cost you per year if you don't pay anything towards fuel and you aren't into the higher rate tax band.

Cars are harder to work out, you need to know the exact make / model, but it's considerably higher than a van.

Income Tax changes to the van benefit charge and fuel benefit charges for cars and vans from 6 April 2020

www.gov.uk