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Can you issue a P11D for a non-employee?

Can you issue a P11D for a non-employee who benefits from a company asset?

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A former employee is allowed to use his company car for a period after his employment terminated and it is not part of any employment contract. As the individual is no longer an employee and now works for a non-connected company does a benefit arise that should be reported on a P11D? Reference to the law or any HMRC guidance would be appreciated if anyone has come across this unusual situation. Thank you.

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By David Ex
02nd Aug 2021 15:22

EIM12815 Might shed some light although doesn’t appear to refer to the PAYE reporting requirements.

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DougScott
By Dougscott
03rd Aug 2021 15:22

Thank you - a little more complex than one might think.

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By petersaxton
03rd Aug 2021 15:26

Isn't the benefit due to his employment?

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Stepurhan
By stepurhan
03rd Aug 2021 17:58

Unless there is some detail missing, it is part of an employment contract. The "terminated" one. The suggestion provided by David Ex and the links from there should set you on the right path.

Is there some other reason the ex-employee is being allowed to use the car? Possibly worth checking with your client if you don't know of any other reason yourself.

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By SteveHa
04th Aug 2021 10:12

Stepurhan's question is pertinent, in as much as "why". If because the director felt like it, I'd venture that the BIK arises on the director.

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Quack
By Constantly Confused
04th Aug 2021 10:22

A flying answer so to speak as I just stuck my head in inbetween VAT returns, but I thought in such circumstances the car benefit was a termination 'payment' to be dealt with via the final payslip, though I admit I don't recall where I read that...

#Edit# I go, I come back again.
https://www.gov.uk/guidance/non-cash-benefits-480-chapter-27
Mentions cars to ex employees, as does
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim12815
and states 401 ITEPA applies.

And more edits, then I really am going.
I note David Ex linked to the same page as me, apologies for repeating advice.

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By brumsub
05th Aug 2021 11:38

Also have a look at EIM23700 and associated links. You don't say if there is any connection between the old employer and the new employer, and it's assumed it is not part of any termination package? Class 1A NIC may also be due.

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By paul.benny
05th Aug 2021 11:49

Client might also want to check on the insurance position, especially if car is being used in connection with new employer's business.

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