Mike Purcell Accountant and Software Consultant

If you have an employee who is currently working from home or has been furloughed, they could be saving tax on their benefit in kind for their company car.

If the employee can manage without their car during this period of working from home, it can be returned to the employer and their benefit in kind will be reduced.

However, if the car is still required for private use during this period, it may be worth considering the removal of the fuel benefit. As the fuel expense is likely to be significantly reduced during this time, the tax on the benefit might be higher than the fuel being paid for. 

Please use the following link for HMRC’s Company car and fuel benefit calculator: http://cccfcalculator.hmrc.gov.uk/CCF0.aspx

It is important to note that even if the car is not used by the employee it will be deemed to be “available for private use” if it is parked at the employee’s house and BIK tax will still apply.   Therefore, we recommend:

  • The vehicle must be returned to the employer.
  • The vehicle must be kept at the employer’s premises during the period of unavailability.
  • If not possible to return the vehicle, all keys can be returned to the employer as an alternative.
  • Recommended that dated photo evidence is kept recording location and mileage.
  • The car must be unavailable for a period of 30 days or longer.