We have 2 leased vehicles which were for employees who have since left and for various reasons not been replaced. As we often have visitors from our global branches, it is convenient & viable to retain these cars for their visits, however there are long periods where the cars are simply parked up in our warehouse.
An employee has requested being able to hire one of the cars from us on a short term basis - does anyone know if there will be any PAYE/NI liabilities on this?
Anon
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HMRC no help
Alan, you are so right - is anyone at all surprised that I got less than no help when phoning HMRC's helpline on this?
The first person I spoke to advised that as long as there was a written agreement to rent the car to the employee showing the rental value and timescale, all would be well, with no additional liabilities toward HMRC. When I asked if it would be best to get a dispensation, the resonse was "Uh, no.." - leaving me in no doubt that this individual, tasked with giving advice on behalf of HMRC, had no idea what a dispensation was!
However, me being the doubter of telephonic information from HMRC that I am, called back, got another person, and was told this time that the company would be due Class 1A's, but the employee would not have any tax liability.
If HMRC are unable to give a straight answer, how are us mere mortals meant to know right from wrong?
No problem - depending on the value
There isn't a problem provided that the rental the employee pays is market-related and there is no BIK value.
It's like anything other facility granted to an employee. The taxable value = market value - value paid by the employee. (In general & simple terms of course but valid nonetheless).
If you're in doubt or want additional assurance for the client and employees, write to HMRC and ask for a written dispensation.
Graham - I disagree
I don't think it's as simple as this.
The car will be subject to the "company car" legislation with the cash equivalent being determined by reference to the MLP and CO2 emissions level and, in this case, the limited period of availability.
In order to expunge any car benefit charge, the payment that the employee makes will have to be "as a condition of the car being made available for the private use of the employee (s144, ITEPA). Simply calling it a rental is likely to end up with the employee being hit with the scale benefit charge without any relief being given for the amount that he pays in rental.
Also, I don't think that HMRC would give a dispensation in advance of a scheme such as this (COP 10). It is more likely that they will simply refuse to comment, let the employer get on with introducing the scheme and then hit him with a claim for failure to report a car benefit on P11D subsequently.