Company Car Tax and HMRC

[RichM3]

Hi All,

My tax code information came through from HMRC, and they have my 'Car Benefit' listed at £3671 for the year. My initial reaction was that this should be 0, given that company car tax on the Tesla model 3 is 0% for this year. I did call HMRC and the guy went away and did some calculations and said its definitely correct. Do I have the wrong end of the stick, or do HMRC?

Thanks!

 

[Icenomore]

Interesting, we’ve also have a car benefit showing but haven’t been able to get hold of HMRC to query. Like you, we thought the car benefit would be 0. We used to have a fuel card for our ice vehicle that the tesla replaced, so wondered if that was causing confusion, but you’d have thought their system wouldn’t allow a fuel card benefit for an EV anyway. Since changing to the tesla a couple of months ago we’ve had several different tax codes come through so are hoping it will just sort itself, at least we know we’re not paying too little and won’t get a bill.

 

[RichM3]

Another guy I work with has his Tesla car benefit listed at over £6000 and he is having real trouble trying to get HMRC to change it. This is kind of why I was interested to know. I get the impression HMRC aren't quite on top of this yet.

 

[GeorgeSymonds]

You're not wrong, it is 0 for a full EV. It was planned to be 2% until the budget in March when it was changed but even that can't be the reason as £3671 would make the car list price £183k

You'll get it back any tax you've over paid when the systems finally catch up with themselves as these things are all estimates until the end of the year when you either do a tax return or the P11D figures are sent through.

I imagine HMRC have been hit like everyone else with people off due to the virus and they seem to be busy throwing cash at anything and everything at the moment

 

[Mf03]

Hi All,

My tax code information came through from HMRC, and they have my 'Car Benefit' listed at £3671 for the year. My initial reaction was that this should be 0, given that company car tax on the Tesla model 3 is 0% for this year. I did call HMRC and the guy went away and did some calculations and said its definitely correct. Do I have the wrong end of the stick, or do HMRC?

Thanks!

Have you had it since the 6th April Or did you have something else?
Did you have fuel on your previous car?
Did you speak to them or do it online?

mine was straight forward online but I didn’t have fuel before, I suspect if you didn’t tell them you weren’t having fuel anymore it may be that. I know it sounds stupid but not everyone’s a car nut and it’s up to you to inform them

 

[RichM3]

I got it in September last year. No fuel previously. I spoke to them, actually, this is the second time I have spoken to them. Both times they seemed fairly clueless to be honest.

 

[arg]

They got mine wrong repeatedly over many years - coming up with a number for the Tesla as if it were in the maximum gas-guzzler category rather than ULEV. They corrected it without complaint each time, but it got boring because every time they touched my account they'd screw it up again.

Eventually I switched my company to doing car benefit as a "Payrolled BIK" (ie. the company works out the tax and applies it through PAYE and it doesn't appear in the employee tax code) which took away their opportunity to mess with it.

 

[GeorgeSymonds]

If its any consolation, a friend of mine works for the worlds biggest accountancy company and a few years ago they couldn't issue his benefits statement as their software wouldn't allow them to enter a zero emmissions car. It was quite embarassing when he pointed out they'd missed it completely and perhaps should correct it. Their payroll system had actually coped ok. Turns out HR double keyed everything into multiple systems.. I mean.. what could go wrong?

 

[RichM3]

The system we use for claiming milage at work has two fuel options. Diesel and petrol. Its one of the biggest expenses systems on the planet. HMRC have classed electricity as fuel for ages. I just put 'petrol' every time i claim.

 

[GeorgeSymonds]

The system we use for claiming milage at work has two fuel options. Diesel and petrol. Its one of the biggest expenses systems on the planet. HMRC have classed electricity as fuel for ages. I just put 'petrol' every time i claim.

Actually, HMRC have never classify electricity as a fuel for some reason best known to themselves, not that it solves your problem.

Advisory Fuel Rates from 1 March 2020

 

[spooksman]

For the 2020/2021 tax year, the 'appropriate percentage' used for calculating the charge on an electric car is 0%, so you should should have nothing in your tax code for 2020/2021. If HMRC need clarification, point them to the appropriate section of Booklet 480, which is their guidance on benefits and expenses.

HMRC doesn’t see electricity as a fuel, so there is currently no fuel benefit charge for electric vehicles. If you go to HMRC's Employment Income Manual EIM23900 which deals with electric cars, you'll see it states "Electricity does not sit within the meaning of fuel so the Fuel Benefit Charge does not apply. And there is no further benefit charge as s239(4) ITEPA 2003 specifically excludes a benefit connected with a taxable car. "

Hope you get it sorted

 

[planehazza]

My codes came through last month. I say codes, I received three letters all within a couple of weeks of eachother. I've just logged in to Gov.uk to check code and car allowance, and they haven't even updated my car... I picked up my Model 3 on 6th March and handed the 530e back on 12th. Shall I do it myself, or get in touch with HMRC/NHS Fleet Solutions once this crazy time is over? I have a feeling I'm going to be owed a lot of tax back.

 

[spooksman]

Shall I do it myself, or get in touch with HMRC/NHS Fleet Solutions once this crazy time is over? I have a feeling I'm going to be owed a lot of tax back.

I would suggest you change your car online if you can (which should be easy).

Your company should probably have sent a P46(car), but with everything going on and the end of the tax year, maybe it didn't happen. The change will get picked up when they do your P11D anyway, but that might be a while yet.