P46 (car)

it is.

There is nothing to stop the company submitting a P46(Car) but no requirement other than as they have said - so not on a change of cars.

There is also nothing to stop the client ringing HMRC and asking them to adjust his code to reflect the change if he so wishes.

Are you sure?

Per CWG2(2009), section 130

'The completed form P46(car)(new) must be sent within 28 days of the end of the quarter to 5 July, 5 October, 5 January or 5 April in which any of the following take place:

• a car provided to the employee/director is replaced by another car which is available for private use'

Sounds like a requirement to me!

see employer bulletin 32...

P46(Car)

For periods from 6 April 2009 onwards, employers will no longer have to complete a form P46(Car) when an employee’s car is replaced. The form will only be required when an employee gets their first car, when they cease to have a car at all and when the number of cars available to them changes (for example they get or cease to have a second car). This will significantly reduce the administrative burden of the P46(Car) on employers.

A temporary revised version of the form will be available on the HMRC website in time for use for the first quarter of 2009-10. A new form will be created for use from 2010-11 onwards.

and to add to this from April 2010 HMRC are changing the validations to stop employers submitting changes of car online via the P46(car) (only new or remved cars can be notified now) so employees will have to ask HMRC to make the necessary adjustment to their code or wait unti the P11D is submtted which coul be nearlyy a year later - this is all suposed to be de-regulatory but given that many employees are downsizing so are due a coding uplift it feels more like a rather cynical way to hold on to tax. It's not clear if HMRC will action paper P46(car) forms on change of car but I wouldn't hold my breath! 

I have sent P46(car) forms to HMRC for a car change and so far they have been processed.

I send them as I'd rather keep the codes up to date as when the underpayment comes out in 2 years time (by the time HMRC process the P11D's!) it's the employer/agent who will get the grief

yes they woud be for now, it's the quarter starting in April that they say they won't action

I think the number of P46 car notifications on a change in car was so low that HMRC have decided its not worth pursuing, for once they have done something sensible.

Aware of the P46(car) notification for CHANGE of car being removed, I did help an employee of one client write a letter to HMRC to get the PAYE put right to reflect the new car and thus avoid a tax overpayment or underpayment for 2009/10.

It worked like this (sorry didn't actually "work"):-

• September 2009 - Letter from  employee to HMRC including full facts and car BIK figures
• January 2010 - HMRC issue a totally wrong coding notice - incorrect car BIK for 2009/10
• January 2010 employee phones HMRC who agree they've made a mistake and promise to issue correct PAYE code number

I personally believe that the removal of P46(car) notification for car CHANGES was an error of judgmennt on HMRC's part.   Yes, brownie points for being seen to  be "reducing paperwork / compliance" for employers but increases the likelihood of PAYE under and over payments for employees.  Experience tells me that most employees don't like receiving assessments from HMRC showing tax underpaid nor do they like seeing confusing adjustments in one years coding  notice regarding previous years under or over paid tax.

I do this a lot and they just take the details over the phone and the new code normally comes out in within about 10 days, saves a lot of time.

have the full details that would be on the P46(car) available and they know which questions to ask. So much quicker and easier.. if your an agent, use the agent priority phone numbers, you get through first time almost everytime.

HMRC have removed the requirement to report replacement cars from 2009/2010, but they will still accept and process car changes reported to them by employers until 5/4/2010.  For 2010/2011 they will no longer accept any replacement car information from employers. This includes electronically delivered P46(car) replacement car information.

Even though HMRC will no longer accept this information from employers, they have to accept it if it received directly from employees (or their agents).

With employees being encouraged to drive greener cars, shouldn't they receive the resulting tax breaks ASAP instead of having to wait until after the end of the tax year?

The only way you can guarantee that company car drivers will pay the correct amount of tax is to submit a statement of all of the company cars the employee has been provided with. To aid HMRC in incorporating the correct deductions for CAR and FUEL in the employee's tax code it is advisable to show the calculated cash equivalents on this statement.

Our software the P11D Organiser www.p11dorganiser.co.uk produces a company car benefit statement for use by the employee that HMRC will accept to ensure employees tax codes are kept as accurate as possible.

John

Yes that is quite correct. It is the employee who now has to inform HMRC of change of car details.

HMRC have recently announced a kind of semi U-turn on this.

For 2010/11 the arrangement remains that P46(car) forms can only be sent when the employee first gets a car, stops having one or the number of cars changes, for instance a second car is provided.

For 2011/12 it will once again be possible to send a P46(car) for a change of car.  However these will only be accepted electronically, NOT on paper.

Neil.

Change of car:
As I understand things, in the current tax year to 05/04/11 we are NOT (as an employer) "required" to submit P46 (Car)...and, if we did, this would not be processed anyway.  I believe (from reading the above posts) that it is the employee's option whether or not they inform HMRC where the car change during the year...so, if they are downsizing they should inform them to get a more beneficial tax code.  For the employee to inform HMRC they will need to hand all the information that would have been provided on the form P46 (Car) so, as employers, we might as well continue producing them!!

However from 06/04/11 from the posts above I understand that they are changing the goalposts again?  We "can" (not compulsory) submit P46 (Car) for car changes, providing we do it online.

I'm interested to know what employers / agents are doing in practice?  And has this caused problems with Employee's tax codes?  An example we have just experienced for one of our senior staff is as follows:

P11D for 2009/10 submitted by deadline in July 2010.  HMRC eventually sent an amended coding notice in mid-December 2010, which was completely incorrect: the employee had changed his car during the tax year and, rather than remove the old car, they simply added the new one so that the employee was assessed on 3 cars and 3 fuel benefits duirng the tax year!!!  When challenged HMRC (Bournemouth) stated that they had not been advised that there had been a change of car, pointing the finger squarely at us as an employer....!!!  Needless to say they are going to amend the coding notice, but I wait to see if it comes in correct!

I am minded to continue completing P46 (car) and providing them just to our staff with a covering note advising them to call the tax office with the relevant details...the employee can then make their mind up whether it would be beneficial to submit the form or wait for the P11D...any thoughts?

I have called HMRC on the employers behalf to advise them that an employee's car has changed and they have accepted it, but I would go with your suggestion of:

"I am mided to continue completing P46 (car) and providing them just to our staff with a covering note advising them to call the tax office with the relevant details...the employee can then make their mind up whether it would be beneficial to submit the form or wait for the P11D...any thoughts?"

The ball is then in the employees court.