Hire Cars & Benefit In Kind Tax

Thursday, 4. March 2010

What is the benefit in kind tax position of an employee who is provided with a hire car? I could go into lots of detail as it depends on whether the employee has a company car provided and whether he has it for 30 days continuously. Whether the car is better or worse than his company car and if it’s not to replace a company car then how much of the mileage is private! Oh this is so boring, If you really want to know look it up on Google or something! I’ll just move on before I bore myself to death! By Graham Hill

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Posted in Car Finance, Car Finance Info, Driver Rights, Essential Information, Graham's Latest Blogs, Legal Issues, Money Saving Tips, Motoring Tips by

2 Responses to “Hire Cars & Benefit In Kind Tax”

  1. November 16th, 2011 at 6:32 pm

    mehdi Says:

    Hi,

    I recently hired a car for company business to attend a client site on a daily basis. I had the car for 26 days, including weekends, but the car was parked on my drive friday night after work til Monday morning. At no time did I drive the car for private use. Any private use was incidental. Eg on the way home diverting to do shopping or stopping to see friends.

    My business use milage for the 26 days was 1800 and the car was returned with 1900 miles, i.e 100 miles incidental use.

    My company now tells me that since I had the car for more than 14 days, it is automatically considered BIK and they have to report it to HMRC and deduct it from my paye. they are not interested in details and I can not find any reference to 14 days continuos hire and automatic BIK anywhere.
    I feel my company is either making a mustake, or has a catch all policy to make life easier for itself .

    Please, could you shed some light on this?

    Many thanks,

    Mehdi

  2. November 27th, 2011 at 1:29 pm

    Says:

    Hi Mehdi, It is my understanding that provided you don’t have a company car normally that you are not subject to BIK tax provided the car has only got ‘incidental private use’, ie. of the type you describe. This incidental use must be small by comparison to the total mileage travelled – so you pass that test. I don’t know of any 14 day rule, however, it is my understanding that if you have use of the car over weekends, this isn’t then considered as incidental and is therefore subject to BIK tax. As we seem to have two conflicting rules here I would strongly sugest you contact the Revenue for clarification. If they give more guidance on the suggested 14 day rule I would be interested to hear what they say. Good luck. Graham Hill

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