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.
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