Client has bought a company car on hire purchase lease agreement.
He is adamanat that he uses the car and fuel for business trips only and has a personal car for personal usage. He even parks it at his work place. The car is available 365 days a year.
Is he required to report this on P11D and his self assessment?
Replies (10)
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I take it you mean that the client's company has bought a car, as opposed to your client has bought a car from the company.
I vote yes. It's available. Whether he uses it is irrelevant.
The whole point of the "available" thing is to make it pointless for the taxpayer to argue that the car is only used for business. If your client genuinely does only use it for business, I'm afraid he's a victim of other folks' tax evasion.
I don't disagree, but the OP may want to consider how closely aligned his client's circumstances are to those in Gilbert v Hemsley. I suspect not too closely at all, but worth having a look just in case.
And to add
Do not believe him
Humans are not that disciplined.
Did he keep a journey log for every mile?
There was a VAT case, reported here some 18 months ago about recovery of input tax on company owned vehicles. Not the same, thing as bik, but may be instructive.
Employee had personal cars of similar quality. Company vehicles kept on site, keys in safe, signed out for each business journey, detailed mileage logs.
In that case, company might be able to argue that they're not available for private
use.
https://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j11273/TC...
OP, note HMRC are VERY cynical of attempts to argue that a car falls outside the BIK rules. Concentrate on 'Availability' rather than 'Use'.