Do I have to pay company car tax on a rental car from Alamo?

Question

Hi,
I have a question and needs an answer quickly for the meeting shortly. Let's say I get a rental car from Alamo or any other rental car companies at the airport. I rent the car monthly, let's say GBP600 plus VAT for example. I will get direct reimbursement from the company. Or I can use the company credit card to pay for this directly. Do I have to pay company car tax on it? for 4 months rental? or for 12 months rental? How about fuel benefit tax? Over 95% of the mileage are for business use. However, I understand that even for the commute between office and home, it's still considered as private mileage.

And if I do have to pay company car tax, how do they calculate the tax? Since I'll be switching to different rental cars every few months, how are they going to calculate the value of the cars for the company car tax?

thanks a lot!!

Answer 1

the car is a hire car and unlike most company cars which are leased. when you lease a car through your company the tax office have to be informed that you are doing so so you have to pay company tax. THERE IS NO SUCH obligation to do so with hire cars so the tax office will never know so therefore you will not be liable for tax. You may be better off all round

Answer 2

Just to emphasise what Fengirl has said a benefit is charged to tax if a car is made available for private use (and the cost of this is not made good).

It does not matter how many private journeys are made - or even if there are none. The charge is still applicable if the car is available for the private journeys.

The charge for the use of the car is calculated as a percentage of the list price. The percentage applicable varies according to the carbon dioxide emmissions of the car.

The fuel charge is based as the same percentage of a fixed figure which I believe is £14,400.

The above calculations are done on a pro rata basis where the vehicle is only available for less than the complete tax year. It should be calculated on the number of days it was available.

And yes, if the car is changed every few months the computations will be numerous but that is down to the employer to sort out. The employer has to notify HMRC of all the changes on a quarterly basis.

Answer 3

Previous answerer is incorrect.
If your employer supplies a car which is available for your private use, this is a taxable benefit, whether the vehicle is owned by the employer or leased. Your employer is responsible for finding out the list price of the vehicle and notifying HMRC.
If the employer reimburses your fuel fuel bills and you are not obliged to reimburse him for private mileage, then there is a fuel charge as well.
You are correct - home to work mileage is private, not business.
EDIT: The calculation of the benefit is your employer's problem - if they want you to use hire cars, then they have to deal with the admin!

Answer 4

The OP said he will be switching the rental cars every few months. How can they calculate the tax? like 3 months on car #1, another 3 months on car #2?