You must report the car or fuel to HM Revenue and Customs (HMRC) if they are provided as part of a salary sacrifice arrangement.
If you provide the car and fuel in another way, you might not have to report or pay anything. To be exempt, your employees must use the car or fuel in one of the following ways.
Privately owned cars
You do not have to pay anything on cars that directors or employees own privately.
Cars available for business journeys only
Business journeys are either:
- journeys that are part of your employee’s duties, eg a service engineer travelling to an appointment
- journeys an employee has to make to get to a temporary workplace
To be exempt, you must tell your employee not to use the vehicle for private journeys and check that they do not.
Cars adapted for an employee with a disability
This includes cars with automatic transmission if the employee’s disability means they need this. These cars are exempt if the only private use is for:
- journeys between home and work
- travel to work-related training
Fuel that employees pay for
You do not have to pay or report on fuel, including for private journeys, if either:
- employees buy the fuel for their own use
- you buy it and they pay you back during the tax year, and their payment is equal to or more than the amount you paid
You do not have to pay or report on ‘pool’ cars. These are cars that are shared by employees for business purposes, and normally kept on your premises.
You’ll have to pay if a pool car is driven for private use, or if a car is shared by employees and does not qualify as a pool car.
Cars provided to close relatives
You do not have to pay anything if both:
- you’re an employer who’s an individual, eg a sole trader
- you’re providing the car to someone who works in your business, but only because they’re a close relative and not because they work for you (eg you give your child a car as a birthday present)
A close relative includes:
- your spouse or civil partner
- your son or daughter, and their spouse or civil partners
- your parents
- any other dependants or guests of your household