[Mr NSB]

I'm asking this on behalf of my son.

My son has recently started a new role and has been given a company pool car (Golf) while he is waiting delivery of his 330e. The car was available to him from the 4th of August and his employer calculated the BIK for him and it is £142 per month.

He is actually paying £212ish per month for this car and his employer says it is because he is liable for the tax on the car from the start of the tax year even though he didn't have use of it until August. Is this correct?

It seems the higher cost is because they are working out the annual BIK and dividing it over the remaining 8 months of the tax year. Again is this correct?

[isleaiw1]

Originally Posted by Mr NSB

I'm asking this on behalf of my son.

My son has recently started a new role and has been given a company pool car (Golf) while he is waiting delivery of his 330e. The car was available to him from the 4th of August and his employer calculated the BIK for him and it is £142 per month.

He is actually paying £212ish per month for this car and his employer says it is because he is liable for the tax on the car from the start of the tax year even though he didn't have use of it until August. Is this correct?

It seems the higher cost is because they are working out the annual BIK and dividing it over the remaining 8 months of the tax year. Again is this correct?

Tell him to ring his tax office, give them the details of the car (including the emissions etc) and date it was fits made available and they will adjust his tax code accordingly...

I am presuming those numbers are reductions in net pay from his tax code being adjusted? he isnt a higher rate tax payer is he?

[JLR1969]

Originally Posted by Lobb

No.

It's calculated pro rata through the tax year.

Exactly this.

You only pay BIK for the time you had the car.

[F30Andy]

I didn't think BIK applied to pool cars.

[454697819]

that's BS from his company - as above its pro rata - However he can tell the HMRC by his personal online tax account, it is in my experience the quickest way of getting things resolved with HMRC these days.

Best of luck.

And remember comcar.com for actually calculating the BIK to be deducted - helps if you understand what they are taking and what they should be taking.

[454697819]

Originally Posted by F30Andy

I didn't think BIK applied to pool cars.

only if no private mileage is done in it.

I.e it stays at the office and is driven on business.

[nickcuprar]

As others have said this is BS.

He should only pay the tax from the day he received the car.

Imagine joining a company 1st of March and being liable for 11th months of BIK!

[davyk31]

Worth checking out if their figure of £142 per month is right?

[willjames]

As others have said, ring the Tax Office and let them know the details of the car and when it became available etc.

Mind you the Tax Office may still mess it up. I’ve had a company car for years and I always seem to have an ‘underpayment’ every year which means they adjust my tax code down each year...you gotta love em 😆

[Mr NSB]

Thank you all for your responses. He has been on to HMRC today and his employers payroll department for a better explanation of how they are calculating the BIK.

[planemad]

I thought p11d was paid 1 year in arrears.

Also why would the company notify HMRC so soon?
I have to submit my employees P11d benefits annually for the previous year.

[davyk31]

P11d is the company paying national insurance on employee benefits. Employees need to pay benefit in kind tax on cars and fuel from day one which will be handled by inland rev adjusting their tax code.

[isleaiw1]

Originally Posted by planemad

I thought p11d was paid 1 year in arrears.

Also why would the company notify HMRC so soon?
I have to submit my employees P11d benefits annually for the previous year.

Companies generally notify HMRC monthly or quarterly of changes in provision of cars so employees don't get up to 12 months behind in the tax due...

[NanasBack]

This years tax code is for the benefits you had last year, so is effectively, a year behind. (Maybe longer if they are catching up with you).

Car use is pro-rata. If you had the facility for 6 months, then you will pay 50% of the BIK.

But beware.
For a fuel card, if you use even 1 mile of private use, you will pay the full BIK charge for the card, for the entire year!

I was caught out like this, albeit, a few years ago.

[isleaiw1]

Originally Posted by NanasBack

This years tax code is for the benefits you had last year, so is effectively, a year behind. (Maybe longer if they are catching up with you).

Car use is pro-rata. If you had the facility for 6 months, then you will pay 50% of the BIK.

But beware.
For a fuel card, if you use even 1 mile of private use, you will pay the full BIK charge for the card, for the entire year!

I was caught out like this, albeit, a few years ago.

Unless you can argue that it's provision started or stopped on a certain date when it can be pro rata'd but best to clear that with them before you do it (especially if you stop the provision but are still employed by same co)