Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

CoronavirusCompany carsLatest NewsPay & benefitsTax

Company car drivers offered tax relief during coronavirus lockdown

by Ashleigh Webber 3 Apr 2020
by Ashleigh Webber 3 Apr 2020 Shutterstock
Shutterstock

Employees with company cars who are unable to use them because of the current lockdown are to be granted some relief on the tax they pay on their car benefit.

HM Revenue and Customs will not see cars as “available” for benefit-in-kind tax purposes if employees are able to “virtually” hand the car back to their employer – by posting their keys, for example.

The announcement has been welcomed by law firm MHA MacIntyre Hudson, which had been lobbying HMRC to relax benefit-in-kind taxation on staff with company cars. However, it has urged the government to go further to ensure employees with this benefit are not penalised while they are unable to use their vehicles.

“HMRC’s decision that company cars won’t be seen as available for benefit in kind tax purposes where they are ‘virtually’ handed back, by returning keys and fobs, was a positive move,” said Nigel Morris, employment tax director at MHA MacIntyre Hudson. “However, it perhaps does not go far enough in dealing with the associated issues of having a car that can’t be accessed, moved in an emergency situation or maintained – which the industry and HMRC may need to consider.”

Morris told Personnel Today that adjustments were usually made to the benefit-in-kind tax deductible from an employee’s salary if the company car was not available; if they were in for repair, for example. However, this relief is not offered if the period the car is unavailable is less than 30 days.

The law firm is now urging HMRC to lower this 30 day period to 21, to allow the relief to kick-in earlier.

“Otherwise even handing back may not save benefit in kind tax for drivers, or National Insurance Contributions for employers if the car is reinstated within 30 days [if the lockdown lifts],” Morris said.

Morris advised that employers should also consider revising their policies around private fuel benefit – for example, if they received funds for personal fuel use via company fuel card – if employees were unable to drive their company vehicles. This would prevent employees from being taxed on a benefit they cannot use.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

“Even if a car is not withdrawn the private fuel benefit can be, as this does not need a physical return of the fuel card. It will, however, need a change of policy and employee agreement to proportionally reduce their benefit while the car remains unavailable. Companies wishing to make this decision need to take action by 6 April and should speak to their advisers urgently for the appropriate guidance,” he said.

Compensation and benefits opportunities on Personnel Today

Browse more compensation and benefits jobs

Ashleigh Webber

Ashleigh is a former editor of OHW+ and former HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support.

previous post
Treasury urged to look again at coronavirus scheme loophole
next post
From firefighter to nutritionist: tackling obesity in the fire service

3 comments

Alex 9 Apr 2020 - 1:57 pm

Hello

Do we have to ring hmrc and declare that or is this automaticly seen by their system and not taxed?

And also how do you prove that you have sent the keys back?

Kind regards

Russell 10 May 2020 - 1:15 pm

This is good news but doesn’t explain how to actually claim back BIK tax on a company car during lockdown. The gov.uk website is too complex to find anything vaguely relevant to this subject without exhaustive and fruitless searches.

My company car went in for some repairs at a repair centre on 17th March. The centre went into lockdown before the car was ready, which was not released until 7th May, i.e after 60 days. Since then I have been furloughed and am not allowed to use my car for business use until furlough ends.

Where and how do I claim?

Bhurinder Singh Gill 6 Aug 2020 - 10:20 am

I spoke to HMRC this morning (5th August) because I have retained possession of the car and the keys because I employer does not want to risk losing them – HMRC said sorry, the BIK stays on your tax code. Pretty poor.

Comments are closed.

You may also like

How salary sacrifice schemes have sealed the deal...

18 Dec 2024

EV salary sacrifice schemes are now a prime...

2 Dec 2024

Electric car fleets in UK face tariff uncertainty

14 Nov 2024

Real-time reporting of benefits in kind to start...

30 Oct 2024

Salary sacrifice could face ‘crackdown’ in Budget

29 Oct 2024

EV salary sacrifice: the second hand option

3 Oct 2024

Salary sacrifice boosts electric vehicle take-up

9 Sep 2024

Salary sacrifice car schemes: A guide for employers

16 Aug 2024

How to develop an electric vehicle salary sacrifice...

12 Aug 2024

‘My salary sacrifice electric car is saving me...

12 Aug 2024

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+