Taxation: Company Cars

(asked on 2nd June 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will review the tax charge on company cars in cases where the covid-19 outbreak has reduced their use or resulted in them being unused by the beneficiary.


Answered by
Kemi Badenoch Portrait
Kemi Badenoch
President of the Board of Trade
This question was answered on 8th June 2020

Where a car is made available to an employee which they can use for private purposes, this represents a taxable non-cash benefit, regardless of whether the employee uses the car.

Normally, HMRC would only consider a company car to be unavailable if it has been physically handed back. However, the Government recognises the challenges faced by households as a result of COVID-19, including restrictions on movement that may prevent a company car from being handed back or collected. Therefore, during this period HMRC will accept that a car is unavailable if its keys are returned and either the contract is terminated or thirty consecutive days pass.

HMRC’s guidance on this can be accessed here: https://www.gov.uk/guidance/how-to-treat-certain-expenses-and-benefits-provided-to-employees-during-coronavirus-covid-19

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