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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.
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.
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.
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.
