How do I tell HMRC that I have a company car?

If you run a fleet car in the UK, you need to let His Majesty's Revenue and Customs know – and if you don’t you could end up facing a hefty fine. Here’s how to stay on the right side of HMRC.....

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Getting a new company car is a joyous event, but there are a few rules you need to follow if you’re to avoid His Majesty’s Revenue & Customs (HMRC) coming along and taking the shine off the experience.

First the good news: your employer will usually notify HMRC on your behalf when you get a new fleet vehicle.

However, legally it's down to you to make sure your company has actually done all the paperwork. If your employer tells you the responsibility is yours, it’s best that you know what procedures to follow and what hoops you’ll need to jump through.

Read more fleet and company car advice

And, of course, if you own the company, you're responsible for knowing the rules and regulations – and making sure they're being followed to the letter. Remember, HMRC has the power to impose heavy fines if you give inaccurate information.

So, to keep you on the right side of the law, here's everything you need to know about informing HMRC about your company car...

The UK Government's tax advice website

How to tell HMRC that you have a company car

Paperwork – that’s what’s needed. So, when you get a new fleet car you need to let HMRC know by filling in and submitting a P46 (Car) form.

Indeed, a P46 is required when you first get a company car, when you get a new fleet car, and when you no longer have access to a company car.

Happily, paperwork isn’t really paperwork any more, so you can fill out the P46 (Car) form online on HMRC’s PAYE online service. Or, if you prefer, you can fill it in online, download it, print it and send it in physical form. If neither of these alternatives appeal, you can use HMRC-recognised payroll software.

You’ll need to ensure that the car is fully detailed on your end-of-year tax forms too, because you’ll need this to work out the tax and National Insurance to pay on the car benefit (and also fuel, if that applies to you). 

These rules apply to all fleet cars, so if you happen to run a plug-in hybrid (PHEV) or electric company car, you’ll still need to keep HMRC fully up to date.

Read more: How benefit-in-kind (BIK) tax works

How to tell HMRC you’ve replaced a company car

Yes, you do need to tell HMRC when you replace your fleet car with a new one, but the good news is that you don’t need to submit a new P46 (Car) form. Just go online to the PAYE Online service, or use HMRC-recognised payroll software to notify them. 

If you don’t want to do this, you can simply tell HMRC at the end of the tax year using your end-of-year forms. But beware: if you choose to do it that way, you must make an note of the date you changed your company car so you can give accurate information.

Read more: The cheapest company cars

When you don’t need to tell HMRC about a company car

As with any rule worth its salt, there are exceptions, so you don’t always need to tell HMRC about fleet car changes.

For example, if you’re an employer there’s no need to tell HMRC when you’ve invested in pool cars. Normal pool-car rules apply though, so the cars must be kept at the business premises and be used by more than just one employee.

Similarly, if you have an employee with a disability and you provide an adapted or Motability car for them, there’s no need to let HMRC know. The car must be used only for business miles and commuting to and from the place of work.

Finally, the HMRC’s rules don’t apply to emergency vehicles used by on-call employees of the emergency services.

Read more fleet and company car advice

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