Hi all,
I have recently started a new accounting role and have some questions around the BIK implications for employees with company cars.
The current process is:
- employer pays for the car lease - 500 GBP per month
- employee pays for the insurance and fuel, but claims monthly via expenses the business miles at the HMRC company car rate
- employee makes a contribution of 50 GBP per month towards the car
The questions I have are:
- Is there any BIK liability for the employee or does the salary sacrifice offset this?
- If there is a BIK, how should the employee tax liability be settled - via payroll monthly or on their P11D at the end of the tax year? The company has settled last years employer NI on the P11D form.
Thanks in advance for your help guys!
Kind regards,
James
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Replies (8)
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No idea - far too little information here.
What is the calculated car benefit ? List price x appropriate percentage for the emissions rate.
In whose name is the lease ?
In whose name is the insurance ?
What "company car rate" are you using ? The 45p one or the fuel only one (around 15p - depends on engine size) ?
Hi James, your new role is presumably with the employer that has this scheme. There's no way that this scheme would be in place without your new employer already knowing the answers to your questions. Does your new employer know you are posting here? Why, actually, are you posting here?
Hi there,
This is a stand alone role and as it's that time of year when everyone is on holiday.
I just wanted some advice from more seasoned individuals :) - hence the posting!!
I'll discuss with the boss upon her return.
Cheers Madam Dragon!
I just wanted some advice from more seasoned individuals :)
We need more than sawdust to plait.
Well clearly you are not posting in work time. What's with that, if it's a work question?
What if someone gave you a duff answer based on your incomplete information (sawdust), you somehow acted on it (though, with everyone on holiday, it's not clear what that action would be) and then when the boss got back.... sorry, getting distracted, run it by me again, why exactly did you post?
Key question is - in whose names are these contracts?
Never mind who pays (for the time being).
We can't even start to give a sensible answer without that.
Agreed. There are at least three different ways in which a tax charge might arise on the employees here; if James really wants help, he needs to let on a bit more.
On the basis that the 2016-17 forms will have already been submitted take a look at those. If not (oh dear!) take a look at the 2015-16 ones.
