Company Cars – Online reporting of replacement cars from 2011Wednesday, June 30th, 2010
Form P46(Car) is used to notify HMRC when a car becomes available to an employee, or ceases to be available, or the employee ceases to be a lower-paid employee and becomes liable for the car benefit charge. However, there is no way of informing HMRC when one car is replaced with another – that facility was withdrawn during 2009/10 and forms P46(Car) notifying replacement cars have not been accepted since April 2010.
The inability to advise HMRC of replacement cars can mean that an employee is seriously under-taxed or over-taxed in the tax year that the change occurs. The employee’s tax code is only changed after the relevant P11D is filed well into the following tax year.
HMRC now acknowledges the impact that this situation has on employers and employees and has been working with a small group to come up with a resolution. From April 2011, employers will be able to notify HMRC online of any replacement car changes at the time they occur. The P46(Car) form will not be changed however, so only online notifications will be accepted.
Employer provided company cars: changes from April 2011