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  • Tax - Employee pool car agreement
    Employee pool car agreementBanning private use is essential for a car to be considered a pool car by HMRC. A verbal ban may work but it's more sensible to require the employee to sign an agreement that specifically states that the car is not to be used for private use. This will also help convince HMRC that you operate a genuine pool car arrangement. Terms of useVerbally banning employees from using pool cars for private journeys was good enough for one VAT tribunal; however, we recommend that you'll be on much...
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  • Tax - Company car lump sum contribution agreement
    Company car lump sum contribution agreementIf you wish an employee to contribute towards the purchase price of a company car, it's a good idea to formalise the arrangement. This will reduce the taxable benefit in kind for the car.Capital contributionA capital contribution can be made by a director or employee towards the cost of either the car itself or any of the accessories which are taken into account in determining its price for taxable benefit purposes. The capital contribution is deducted from the list...
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  • Tax - Company car running costs contribution agreement
    Company car running cost contribution agreement   
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  • Tax - Employer/employee company car fuel agreement
    Employer/employee company car fuel agreementTo avoid a tax charge arising where you provide an employee with fuel for their company car, have an agreement requiring them to reimburse the cost.Fuel benefit chargeIn addition to the company car benefit, a director or employee who is provided with a company car may be liable to a fuel benefit charge. This fuel benefit will arise on any free or subsidised fuel provided for private journeys.How much is it?When a company pays for fuel used in private journeys whether...
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  • Tax - Letter to HMRC regarding pool car status
    Letter to HMRC regarding pool car statusA pool car can be very tax efficient but in order to get one past HMRC you'll need to meet some strict conditions. To avoid uncertainty, use this letter to obtain confirmation from HMRC that the terms on which the car is used make it a pool car.No private useGet a pool car past HMRC and you can secure some excellent tax savings - no taxable benefit on the driver, no fuel benefit charge and no employers' NI. But to obtain this status, you'll need to gather evidence together...
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  • Tax - Cars and car allowances policy
    Cars and car allowances policyIf you provide your employees with a car you can use a policy to set the terms and conditions of its use. If only a couple of employees have company cars, you might find it easier to include the provision in their contracts of employment rather than a policy in a staff handbook. A company carWhen providing an employee with a company car, you need to think carefully about who is going to pay for what in terms of fuel, insurance, MOT, licensing, repairs, etc., who can drive the car,...
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  • Tax - Employee business mileage record
    Employee business mileage recordEmployees and directors are required to keep a detailed record of journeys for which they receive a mileage allowance from their employer or where they claim a tax deduction for business travel. A copy of the record should be retained by the employer and by the individual. Personally Owned carsEmployers can pay directors and employees tax and NI-free allowances for business mileage at rates shown in the table below. These are known as approved mileage allowance payments (AMAPs)....
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  • Tax - Employees using their own cars for business policy
    Employees using their own cars for business policyIf employees use their own vehicles for business journeys, you should have a company policy which spells out the situation regarding insurance, parking and mileage rates at which you will reimburse them. Tax-free mileageYou can pay any reasonable amount to an employee as compensation for using their own car for business journeys (ordinary commuting does not count as a business journey). The most tax and NI-efficient way to do this is as a mileage allowance. HMRC...
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  • Tax - Pool car journey record
    Pool car journey recordFor a company car to count as a pool car (meaning that employees who use it aren't taxed on it as a benefit) it must not be used for private journeys. HMRC may ask for evidence of this. You should maintain a log of all journeys made in the car.Proof of journeyTo satisfy HMRC that a vehicle is a pool car, you need evidence that it has not been used by one director/employee to the exclusion of others and that there was no non-incidental private use. Using our Pool Car Journey Record is an...
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  • Tax - Memo: invoices for motor expenses
    Memo: invoices for motor expensesHow expenses are controlled is always at the top of HMRC's list of questions during a compliance visit. Using our memo should help you to dismiss enquiries about motor expenses very quickly, before they become too detailed.Compliance visitA compliance visit is often referred to as a PAYE visit, i.e. an inspection of your books and records centred around your payroll but specifically trying to unearth, as yet, untaxed payments and benefits in kind. The inspectors will ask for...
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