February 25th 2015
In principle, the usual scale charge for a director’s or employee’s private use of a company car or van may be reduced by any payment the director, etc, is required to make for that private use. I many cases, especially for directors, it has been the practice for the payment to be made after the tax year end.
However, for 2014/15 and future years, there is a strict statutory rule that payments will not be taken into account unless they are made before the end of the tax year to which they relate - and HMRC have put us on notice that this rule will be rigorously enforced. Any company operating such arrangement should, therefore, ensure that payments are now made in good time.
This will not affect the longstanding easement under which no fuel scale benefit is charged where the director or employee fully reimburses the cost of the fuel used for private motoring, even if (for example) the mileage-based payment for March is not made until (say) the end of April.
Please contact DSC Chartered Accountants in Harrogate if you would like to discuss this article in more depth.
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