Company Car ‘Availability’ and Other Expenses – Is There an Impact on Employee Benefits During Lockdown?
Your employee may have been furloughed or is working from home, because of coronavirus, and provided with a company car which they still have. You should treat the car as being made ‘available for private use’ during this period even if your employee is:
- instructed to not use the car
- asked to take and keep a photographic image of the mileage both before and after a period of furlough
- unable to physically to return the car or the car cannot be collected from the employee
Where restrictions on movement applies because of coronavirus and prevents the car from being handed back or collected, HMRC will accept that a company car is unavailable in the following circumstances:
- where the contract has terminated – from the date that the car keys (including tabs or fobs) are returned to the employer or to a third party as instructed by the employer
- where the contract has not been terminated – after 30 consecutive days from the date that the car keys (including tabs or fobs) are returned to the employer or to a third party as instructed by the employer
The return of keys means that a car cannot be driven in any circumstances even if it is still in the possession of your employee.
We also recognise that following relaxation of coronavirus restrictions, it may take some time to collect cars where contracts have been terminated. As long as your employee continues to have no access to the keys until the car is collected from them, HMRC will still regard the car as being unavailable.
For Government Guidance on Company Car Availability and the following expenses and benefits paid to employees because of coronavirus, including how to report them to HMRC, please see https://www.gov.uk/guidance/how-to-treat-certain-expenses-and-benefits-provided-to-employees-during-coronavirus-covid-19
- Living accommodation
- Volunteer fuel & mileage costs
- Paying and refunding transport costs
- Free or subsidised meals
- Salary sacrifice
- Employer provided loans
- Employees working from home
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