Benefit In Kind Chargeable on Maintenance Packs?

Benefit In Kind Chargeable on Maintenance Packs?

Didn't find your answer?

Drivers taking vehicles, such as BMW, as company cars often opt to take the maintenance pack provided with the vehicle.

This usually results in lower maintenance costs for the company leasing the vehicle.

Typically the maint pack will be added to the purchase price of the car resulting in a higher list price as its treat as an optional extra.

This has the effect of increasing the drivers benefit in kind tax.

The legislation states the qualifying accessory should be attached to the vehicle, obviously this is not and there is no benefit to the driver so I would expect there to be no benefit.

I believe there is a concession to remove the cost of the maint pack from the taxable list price but unfortunately cant find it anywhere, can anyone else help?

Much appreciated.
Steve Huddart

Replies (4)

Please login or register to join the discussion.

avatar
By rtrussell01
09th Jun 2006 14:05

Non-taxable options
The newly revised version of Comcar has been built to help provide information on this point. If you have a play with the online car tax calculator at http://www.comcar.co.uk/newcar/companycar/taxcalc/g3options.cfm?ID=108619&clk=1
you will see that the BMW 3yr service packs do not increase the BIK value, whereas other options do.

Thanks (0)
avatar
By Chris Smail
31st May 2006 13:45

Why on earth...
would you capitalise maintenance.

The maintenance goes to motor running costs and if material gets prepaid.

How did you reach the conclusion that it was an accessory?

The tax legislation refers to the list price, not the invoice amount.

Thanks (0)
avatar
By Chris Smail
01st Jun 2006 11:15

Apologies
You did not talk about accounting treatment, sorry.

I did not have my tax head on, I would never have thought that maintenance could be included in the list price for P11d purposes, despite the way it is invoiced. But you are right, it is important to check the detail of the legislation.

Thanks (0)
avatar
By Chris Smail
01st Jun 2006 11:27

See EIM 23141
'Definition of accessory, Section 125(2) ITEPA 2003
This includes any kind of equipment, but does not include:..'

So the guidance specifically refers to 'equipment'

ITEPA 2003 Sec125(2) reads:-
Cars: treatment of accessories
125 Meaning of "accessory" and related terms
(1) In this Chapter "qualifying accessory" means an accessory which-
(a) is made available for use with the car without any transfer of the property in the accessory,
(b) is made available by reason of the employment, and
(c) is attached to the car (whether permanently or not).

(2) For the purposes of this Chapter "accessory" includes any kind of equipment but does not include-
(a) equipment necessarily provided for use in the performance of the duties of the employment;
(b) equipment by means of which a car is capable of running on road fuel gas;
(c) equipment to enable a disabled person to use a car (see section 172);
(d) a mobile telephone (within the meaning given in section 319(2)).

So the legislation also specifically includes only 'equipment'

Ergo no concession neccessary

Thanks (0)