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Director, uses company van but has no remuneration from the company

Director, uses company van but has no...

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A small company owns a van which is used on solely company business. The sole director of the company drives the van, nobody else does. At the moment he is drawing no salary whatsoever from the company as he has invested several thousand pounds in the company and if there is any spare cash in the company (not often, so far) then he has just withdrawn a small amount as a repayment of his loan. Although HMRC are aware that he is a director of the company, he does not have a tax code with that company, or indeed any other company as he genuinely has no income at the moment. However the company will hopefully make enough money in the current year to allow him to at least take a few thousand of a salary to use up some of his personal allowance. It was wasted in 07/08. The van was acquired in April or May 2008 and the question is should this have been declared at the time, even though he takes no salary? And what is the best way forward now? Should he ask HMRC to issue him with a tax code for the current 08/09 tax year? Will they insist that there is a benefit, even though he only uses the van on company business? The other option is to ignore it until 09/10 because he does not need to actually withdraw any money tis year. This is slightly different to my usual experience of these matters because of the fact he has no income. Etc. Sorry for the wordy question, and thank you for any help with this.

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By thehaggis
11th Feb 2009 22:03


If it is solely for business there is no bik.

Every employee has a tax code. The company should use the tax code on the P45 he provided. If he did not provide a P45 he should have been given a P46. Depending on where he signed it (or not) will determine his tax code. A code determined in this fashion is treated as if it were issued by HMRC.

As it seems he has no BIK, the normal PA code determined from the P46 would appear correct.

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By robindr
11th Feb 2009 18:03

Unless I am mistaken .....
.... there is no BIK charge anyway if he only uses the van on company business, which can extend to travel to and from work.

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