Does anyone know, if you change company cars part way through a tax year, is there a hangover of the first car across the remainder of the year? Or do you change tax codes to pay tax on the BIK on the new car only?
Reason I ask is, I gave back a company car in Dec21 and paid a form of tax on it for the remaining 5 months of the tax year before getting it all back in Sep22, the woman on the phone just gave me the “well that’s just what happens”. No idea why they just don’t take you back to a tax code or someone who doesn’t have a car.
So I was just wondering whether you get a hangover when changing cars or that’s just when you give one up.
Any help would be appreciated.
Hi, in theory you tell HMRC you no longer have the car/now have a different car (or your employer can, but I have never relied on this) and HMRC respond to this.
If no one tells them, they will not know to adjust your tax code and your year end P11D would result in an overpayment or underpayment of tax, which would then result in you getting a refund for what you had overpaid or a bill for unpaid tax.
Last edited by andyd30; 24th March 2023 at 15:36.
I’ve always called HMRC as soon as I’ve got a new company car or handed one back. Never rely on your employer to update them.
You can log on to using your government gateway details and remove a car, however I find it easier to call them if you can get through.
I will be later as somehow they keep adding an extra car and fuel benefit to my tax code (4th time now 🙃)
At the places where I’ve had cars, HR have always been very blunt in the fact they do not tell HMRC and the responsibility falls solely on the employee.
Anyone else with any knowledge around whether there is a hangover on your tax code between two cars or whether you go from the tax code relevant to paying tax for one car (say a 330e) to one for a new car (say a Tesla
M3)?
In my experience it is usually at the end of the year, when P11D forms are sent in, that HMRC woud be advised. If HMRC had adjusted your tax code for the current financial year as perhaps you had a car in the previous year, then I don't believe that would automatically re-adjust mid-year (unless you call them, even then it may not be adjusted).
Employers have different ways of managing benefits (on payroll or off), so that may also have an impact.
Worth speaking with your employer and / or HMRC.
Unless you want the hassle of an over or underpayment at the year end, assuming the benefit would be different on the new car, call HMRC and they'll adjust your code accordingly. Some folk don't mind underpaying as they get the cash flow advantage given there's no interest charged if they code it out for collection in a later year.
Definitely call HMRC. I used to change company cars quite often in a former role (I befriended the guy who ran the fleet, and I get bored easily) and had no end of buggering around with tax codes and under / over payments. It's a lot easier to take matters into your own hands and speak with HMRC directly.
Same here, all companies have been useless from that perspective.Originally Posted by wileeeeeey
One of my team ended up with 2 company cars he was paying tax for. Throbber had not noticed until he was chatting about how broke he was & I couldn’t see how his take home was so low.
For an intelligent man, he struggled with some things.
Call them and let them know. Be really clear to HMRC that one car has gone and replaced by another.
Hard to believe (for me anyway) but when I last changed jobs they were taxing me for 2 cars at the same time. When questioned the ridiculous amount of tax I was paying it turned out they didn't know my old car had gone but were aware of the new one. They didn't give a to$$ that 2 cars for one person made no sense.
Anyway, best let them know the exact details or you may get an unpleasant surprise.
You aren't liable to tax on a car benefit for any day after you handed the car back.
Employers can't (legitimately) opt out of their PAYE obligations.
https://www.gov.uk/tell-hmrc-company-car
"You need to send a P46 (Car) form to HMRC if you:
- provide company cars to your employees
- stop providing a company car"
All true. But from my experience of this, HMRC are very slow to update records after the P46 car goes in.
I did it for myself and their records did not update until the P11D process some months later.
So I wouldn’t count on them removing it either if you get rid of the car, until the next P11D or if you call them.
Yes, HMRC are shocking but my response was more directed to the idea that an HR department thought they had no reporting obligations.
Ah, makes sense.
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