tax investigation company car

[rav147]

hi, my company bought a car for use by any employee. we believe we met all the conditions for a pool car. HMRC do not agree but i feel that i can convince them when they see all the paperwork.

my question is this: what happens if they dont agree with me and ask for tax and NIC to be paid what are the implications for the a) company and b) the employees.
there are 4 employees, who pays the class 1 NIC and taxable benefit?
surely not all 4 pay full NIC and tax as if they had one car each?

2 of the employees were directors.

[mullet]

1. What happens if they dont agree with me and ask for tax and NIC to be paid what are the implications for the a) company and b) the employees.
2. There are 4 employees, who pays the class 1 NIC and taxable benefit? Surely not all 4 pay full NIC and tax as if they had one car each?

1. The company will be invited to pay the tax on the employees' behalf, so it will be "grossed up". Class 1A NICs will also be due. HMRC might seek the tax from the directors through self assessment. For the future they will probably want to "pin" the benefit on just one employee or director to make things easier.

2. No, the company pays on just one car. This is voluntary - if the employees and directors are to pay then they will be assessed using the shared car rules.

Incidentally, where is/was the car generally kept at night? Was there any private travel? If so, was it incidental to the associated business journey? How many times in a year was it kept at or near the home of an employee or director?