Where do I park a pool car?

My office is my house.

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Hi. I want to purchase a car for my employees to use. Normally it will be out working Mon-Fri, sometimes with overnight stays. I want to register it as a pool car. It won't be used privately by the employees. Currently he brings the van back to me at night. But my office address is my house. If i purchase a pool car, will i have issues with this?

Replies (26)

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VAT
By Jason Croke
22nd May 2024 09:08

If the pool car is at your house, how do you guarantee (to HMRC) that you or your employees will not use it for a private journey or that others (who are not employees) will use it?

You're suggesting the employee drives to your home in their own car, then takes the pool car from your driveway and goes off to work, then they will return the pool car to your driveway at the end of the day and go home in their own car?

How many employees do you have, or more importantly, how big is your driveway?

Also, if employee currently has a van which they leave at your home every night, why are you going from a van to a car?

As this is not a black/white scenario, you should discuss with your Accountant as to the pros/cons of what you are suggesting.

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Replying to Jason Croke:
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By Airjohn
22nd May 2024 09:37

It would be parked in a carpark opposite my house.
We have 3 employees. 2vehicles.
Employee 3 drives to collect the car in his own personal vehicle and drives home in it after.
The van gets used by a different employee.
I am choosing a car because it suits our needs better. More comfort for long journeys, better protection for expensive delicate testing equipment, cheaper insurance and better financing options.
If I park it in a car park away from home, would this solve the issue? Another family member has a storage yard.

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the sea otter
By memyself-eye
22nd May 2024 09:28

A pool car only needs to be 'available' for private use for HMRC to defeat a claim - even if it is not used privately.
I suggest it being parked at your home address kind of answers the 'is it available?' question.

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Replying to memyself-eye:
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By Airjohn
22nd May 2024 09:39

I have heard this argument, but how is it possible to counter this. Being a director, key holder, decision maker, isn’t any vehicle “available” for private use, no matter where it is located.

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Replying to Airjohn:
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By Mr_awol
22nd May 2024 10:37

Airjohn wrote:

I have heard this argument, but how is it possible to counter this. Being a director, key holder, decision maker, isn’t any vehicle “available” for private use, no matter where it is located.

There's a difference between having a car parked outside your house with the keys in your (home) office, compared to a car you could theoretically access if you drove/walked/cycled x miles to go an open up a (proper) office and access.

Realistically if kept at a director's house it's hard to argue it not being 'available'. I have even seen cases where driving the vehicle would be illegal (due to insurance or other reasons) and HMRC have dug their heels in - sometime more firmly than others, depending on the circumstances.

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Replying to Airjohn:
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By Tax Dragon
22nd May 2024 10:56

Airjohn wrote:

I have heard this argument, but how is it possible to counter this. Being a director, key holder, decision maker, isn’t any vehicle “available” for private use, no matter where it is located.

That's true and can be problematic, but HMRC does take a sensible approach here.

Your issue for you is that there are additional rules for pool cars, which you very likely fall foul of.

Brief observation: I haven't noticed that you have confirmed that your business is via a company (or anybody asking you to confirm). Quick question: you mention avoiding damage to equipment - is this made/stored at your home?

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Replying to Tax Dragon:
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By Airjohn
22nd May 2024 12:33

I am a vat registered company who deals with other companies 90% of the time.
We have testing equipment which is often stored at my home. But sometimes left in a vehicle. This is another reason to use a car as they don’t attract thieves as much as vans do.

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Replying to Airjohn:
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By FactChecker
22nd May 2024 18:34

You're not going to get a categoric/guaranteed answer because in reality it's all a matter of whether or not HMRC decide to check - and, if they do, how a particular investigator interprets the facts.

So what you should be trying to do is to minimise the risk factors (things that, rightly or wrongly, might trigger interest and be hard to disprove subsequently) ... and parking a pool car outside your house is such a risk factor.

For the avoidance of doubt: you say "It won't be used privately by employees" - but that's not enough.
- as others have said, it's availability (not usage) that matters;
- and it's not just by employees; it's also you, your family, etc.

So read up on it and take advice from your accountant - but ultimately it's just one of the risks for which you are responsible, and you make the decisions.

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By rmillaree
22nd May 2024 11:13

i was tyring to find link for a case (tribunal?) where family members put keys in locked box when they were done using the car(s) for business purposes - i think they manged to get away with that one - i cant find the link though. Does anyone remember that case ?
my memory could be playing tricks on me. I dont think it was really old case my memory could be playing tricks on me though .

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By rmillaree
22nd May 2024 11:13

i was tyring to find link for a case (tribunal?) where family members put keys in locked box when they were done using the car(s) for business purposes - i think they manged to get away with that one - i cant find the link though. Does anyone remember that case ?
my memory could be playing tricks on me. I dont think it was really old case my memory could be playing tricks on me though .

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Replying to rmillaree:
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By gillybean04
22nd May 2024 13:20

The only one I can recall was about input VAT.

Barry John Graham v HMRC [2019] TC7313

https://www.casemine.com/judgement/uk/5d5e7da32c94e0111c00e844

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Replying to gillybean04:
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By rmillaree
22nd May 2024 13:41

thanks gillybean04

perhaps that was the one - being a vat related case and it having employees rather than a sole director if thats the one i was thinking of then it wouldnt any relevance here anyway.

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Replying to rmillaree:
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By Paul Crowley
22nd May 2024 13:29

I remember the story, no idea whether it was a tax case.

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Replying to rmillaree:
By Ruddles
22nd May 2024 13:33

Don't think this is the one that you are thinking of but Gilbert v Hemsley may be of relevance. But I'm not sure how much help it would be here, in the case of a car kept at the sole director's house.

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DougScott
By Dougscott
22nd May 2024 11:53

No doubt this might attract the attention of HMRC however in theory they shouldn't be penalising companies for having offices at or close to directors homes/farms etc. If the onus is on the company to prove that the car is only made available for work purposes for employees then surely that can be achieved by (as well as having policies in place) tracking the vehicles movements and tying it in to each employees use/job card. All modern vehicles include tracking software - can this data be downloaded using an OBD dongle? Or fit a tracker to the car? Presumably the director has their own personal car anyway.

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Replying to Dougscott:
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By Airjohn
22nd May 2024 12:31

Yes directors have own vehicles.
A tracker was something else I was considering, but I did consider, how would a trip to a shop to purchase materials, or a personal trip be differentiated.

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Replying to Airjohn:
paddle steamer
By DJKL
22nd May 2024 13:12

Marry up with the purchase invoice for item purchased, however of course there can be abortive trips so couple that with marrying up with timesheets.

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By ireallyshouldknowthisbut
22nd May 2024 15:21

You need good policies.

A decent accountant should be able to assist you in drawing up something suitable so you can prove no availability for private use. The "data churn" type with offices stuffed full of juniors, probably not.

The bar is however rather high here so you will always be under risk.

Personally I would go for exclusions around insurance if this is possible, to demonstrate non-availability if its at your home, and of course detailed logs and tracking.

Or buy a van.

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Replying to ireallyshouldknowthisbut:
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By Airjohn
22nd May 2024 15:46

If I leave it at a carpark 2 miles away each evening, would that satisfy hmrc?

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Replying to Airjohn:
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By Paul Crowley
22nd May 2024 16:09

There are no guarantees. Do your best and hope that HMRC do not take an interest.

I have not yet come across a pool car that complied with HMRC expectations for record keeping on miles. But none of them were challenged.
If you choose a car rather than a car based van, HMRC have every right to wonder why.
Why need that many seats?
The equipment thing does not really sound credible.

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Replying to Paul Crowley:
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By Airjohn
22nd May 2024 16:38

A van is £100 more a month, with the most basic equipment. Worse on fuel, attractive to thieves,£100 more to insure.
A car offers more comfort, more profit, and more security for the equipment. I work in dodgy council estates. Vans get broken into, cars don’t.
I don’t need a van, so why pay the premium for one.

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Replying to ireallyshouldknowthisbut:
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By Paul Crowley
22nd May 2024 16:14

I have always thought the insurance thing not a good idea.
Once a person is in the car, employer cannot control the reasons for driving.
It is bit like having insurance that will not pay out if the driver exceeded the speed limit on the journey.

Buy a car based van is always the safe option, or let the employee use his own car

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paddle steamer
By DJKL
22nd May 2024 17:36

Anywhere, but do not take advice from Keith Moon. (I know, he is really innocent, but.....)

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By David Ex
22nd May 2024 19:54

This is the (current, as far as I am aware) legislation and there is no concession offered for businesses run from residential properties:

https://www.legislation.gov.uk/ukpga/2003/1/section/167

As Paul C suggests, HMRC may well never become aware but if they do, you will have to demonstrate how the conditions in S167 were met in your situation or face tax, penalties and interest on unreported benefits. It's your risk so your decision.

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Replying to David Ex:
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By Airjohn
22nd May 2024 20:27

Thanks. I feel fully prepared with all the info now to make a decision. Appreciate your help everyone!

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By Justin Bryant
24th May 2024 17:47
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