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BIK on minibus

BIK chargeable on minibus ?

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Hi, we have a client company providing transportation services to third parties organisations where they transport their clients staff to different locations. As this can involve a number of staff our client is looking at purchasing a minibus (9 seater) which will be used exclusively for business use. I understand the minibus is classed as a car and therefore potentially BIK will be assessable based on availability. Accordingly, as our clients company is small and the business is operated from home, presumably HMRC would argue as the vehicle is outside the clients home it is available for use 100% and apply the BIK accordingly. The client does have access to 2 personal cars and genuinely will not use the minibus privately. Is there any sustainable argument against the BIK - any thoughts would be appreciated.  

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By Rammstein1
25th Oct 2019 12:42

Pool car?

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By possep
25th Oct 2019 12:51

See HMRC 480 booklet - non taxable benefits chapter 5, non taxable if

The benefit to employees of travel between home and work in a works bus provided that:

the bus or minibus has a seating capacity of 9 or more

the service is available to all employees

the main qualifying use of the service is travel by employees between home and their workplace or between workplaces

substantially, the whole use of the service is by employees (and
their children)

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By millertime
25th Oct 2019 13:07

Hi posep

Apologies, my query might not be clear - our client provides the service to other companies employees, my concern is that the minibus will be parked outside our clients house (there are no company premises) and therefore potentially HMRC would argue a BIK on our client as it is available (being outside his house) despite not being used privately at all. Hope that makes sense.

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Replying to millertime:
By possep
25th Oct 2019 14:03

Put the ownership , insurance etc. in the company name and have the driver(s) who are presumably directors sign an agreement stating that the vehicle cannot be used privately. That can possibly be covered in the insurance as well. That should avoid the BIK issue.

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By jcace
25th Oct 2019 13:44

Have a look at HMRC's Employment Income manual, in particular EIM23100 and linked pages, but also EIM23400

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By paul.benny
26th Oct 2019 09:31

There was a recent VAT case about this reported here where a business owner successfully recovered input tax on cars used entirely for business purposes

In short the facts were
- drivers had their own vehicles of equivalent status. Maybe not quite relevant here but if they have other suitable vehicles available
- detailed journey logs to support use of vehicle being solely for business purposes
- keys had to be issued out for each journey.

I suggest that similar facts would support there being no taxable benefit.

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