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Pool Car

Pool Car

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I am thinking of getting a pool car for myself and my two employees.

The car will not be available for private use and will be kept at the business premises overnight.

The car will be used equally by the three of use for business use and no personal use will be allowed.

Please can you tell me -

1/ does this satisfy all criteria to be a pool car?; and
2/ do I need to submit any forms to the revenue or advise of this?

Any help / advice would be much appreciated.

Paul
Paul P

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04th Jun 2008 14:22

It shouldn't be complicated.
But it usually is.

A pool car is defined at EIM23800

For employees (including directors) to be charged a benefit, the car must be made available for private use. If it is not available, there is no benefit. It is sufficient for there to be a policy saying that it is not available, provided that policy is adhered to. Mileage records will confirm that.

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By neileg
04th Jun 2008 13:25

Still a potential problem, even if remote
I agree with the advice already given, but there's still a chance that HMRC may challenge the status as regards yourself. If you're self employed (sole trader or partner) then the risks are minimal. If it was to be established that there was some private use by yourself then you would need to apportion the costs. The mileage log should either eliminate this (showing private use to be zero) or support whatever adjustment is needed.

If you are incorpoarated and are a director, there's a chance that HMRC may argue that the car is avaiable to you for private use (who is going to stop you?) and therefore a BIK arises. In my experience, if the mileage log demonstrates that there has been no private use, HMRC staff won't pursue this argument but you could get an awkward soul!

Be careful on insurance. Some advisors have suggested excluding private use under the insurance policy. You're unlikely to get this from a standard policy and even if you did, what happens when there is an accident when the car was being used for private use (perhaps in an emergency?).

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04th Jun 2008 11:29

draw up an agreement
1. Get a written agreement, as part of the employees' contracts of employment, setting out the terms on which the car can be used.

2. Keep a log of mileage done in the car.

You should then have no problems with HMRC

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04th Jun 2008 10:53

Insurance
I believ you should ensure that the insurance policy is taken out to reflect that the car is in the Company name and exclusively for business use and covers the individuals concerned.

Premiums will no doubt be more but this should be good documentary evidence to prove the car was a designated pool car.

Not aware that you need to inform HMRC specifically.

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