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So lets say the company gives the director a flat to live in and he pays fair market value for the rent: Not withstanding this:
a) ATED will apply ~ if you live south of Watford :)
b) You still pay full benefit in kind with no deduction for the market rent
Is that right or is there a deduction somewhere?
So, why did the employees not just go straight to the lease company?
Why is the employer acting as an intermediary?
I appreciate that the above two questions are the same!
Thanks
Not answer I was hoping for!
I was hoping someone would say "because the employer gets a fleet discount", which would then demonstrate that there was a benefit to the employee.
Although I appreciate that for most other BIKs there is reference to "cost to employer", as some are referring to below, but when was the last time company cars have been taxed on that basis?
I've thought for a number of years that there was more of a political angle to the company car tax legislation, aimed at discouraging the use of cars which create higher levels of pollution - perhaps I am wrong.
I have never heard so much rubbish in all the years I have been in the profession! Very soon Mr Osborne will be taking the money out of our pockets and the problem is that people are sitting back and do nothing!!!
So it appears that HMRC, by their action, are confirming that b-i-k legislation is there to raise tax, not to equalise the treatment between those who receive employment benefits and those who provide them from their own pockets?
If tax avoidance is wrong, so is this attempt by HMRC to tax a 'benefit' which is not a benefit. Any benefit incurs a cost to the provider. In the case of Apollo Fuels, the net cost to the employer was zero. Henceforth, the employee will be charged to tax on a benefit in kind that does not exist and cost the employer precisely nothing. This goes against natural justice and common sense. Come back The Man On The Clapham Omnibus.
Talk about a sore loser.
Ahills - Then, if the employees banded together and arranged their own cheaper deal, that would be okay? I think this is pettyfogging. May we please have someone in HMRC who shows a bit of common sense? Tax IS now taxing !
Surely the amount the employee is paying in this situation should then be treated as a contribution to the running costs of the vehicle and so a reduction in the chargeable benefit?
Surely the amount the employee is paying in this situation should then be treated as a contribution to the running costs of the vehicle and so a reduction in the chargeable benefit?
That would seem fair, but when was tax fair!
Provided it has been structured correctly, that should work.
Or, if there really is no benefit to the employee in having the employer arrange it, they could just go to the lease company direct!
Apollo fuels got there scheme just about right, but it begs the question, did all employees want a leased car at market rates. I wonder what rates the employees claimed back, its not always 45p & 25 p it can be as low as 7p.
To recap: Apollo Fuels leased cars to its employees at market rates, so the employees paid no more or less than an unconnected party would pay for the same car under the same lease terms. When one of those employees undertook a business related journey in his leased car he claimed a business mileage rate from Apollo Fuels.