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

Pool Cars

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’