Pool Cars – Do you have a ‘no private use’ Policy?

The latest case Vinyl Design Ltd v HMRC [2014] TC 03345 highlights why policies and mileage records are important.

Here are the facts of the case:

• The company’s only 2 employees were the directors
• They had different cars for private use
• They argued the Pool car was only for Business Use
• They had no policy
• They had no Mileage Records
• Pool Cars kept at home due to risk of vandelism

Not surprisingly HMRC won the case !!

So what should you do to prove there is no private use:

1. Keep the car on the company’s business premises
2. Keep the keys at the company’s business premises
3. Prepare a Board Minute
4. Make sure your contract of employment bans private use
5. Keep a mileage log
6. Insure the car principally for business use

HMRC have specific rules on keeping vehicles at home in EIM23465

Even if you do meet the 60% rule you still have to prove ‘no private use’

steve@bicknells.net