A company car made available by reason of employment for an employee’s private use is a taxable benefit-in-Kind. This document discusses in detail the definition of a car and when a car benefit arises; calculation of benefit; non-availability restriction; exemptions; cars for disabled employees; reporting requirements; P11D treatment; salary sacrifice arrangements; and transitional rules.

Points discussed within this guidance note:

> Introduction

Company  cars  are  one  of  the  most  common  taxable  benefits.  In  addition  they  have  quite  a  number  of  complex  rules  and  onerous  reporting  requirements.  Company  cars  are  covered  by  very  specific  legislation which this note discusses in detail, including how to work out if there is a benefit and what is defined as a company car.

> Employees chargeable to tax

> Is there a car benefit?

> What counts as a car?

> The car must be made available by reason of the employment

> Available for private use

> Calculating the benefit

> The pricing stages - calculating the notional price

> Price

> Accessories

> Capital contributions

> Payments for private use

> Appropriate percentage

> Annual benefit charge

> Reduction in benefit

> HMRC tools

> Adjustments to the benefit calculation

> Disabled vehicles

> Exemptions and special conditions

> Emergency vehicles

> Car industry

> Reporting the benefit

> Company car for business use only

> Cars with private use

> Payrolling the benefit

> P11D treatment

> Salary sacrifice arrangements

> Transitional rules


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