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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Car and van benefit: pooled cars and vans: general

Sections 167 and 168 ITEPA 2003

Some employers, or groups of employers, find it convenient to have one or more cars or vans that are readily available for business use by a number of employees. The cars or vans are not allocated to any one employee and are only available for genuine business use. Such cars and vans are usually known as pooled cars and vans.

Sections 167 and 168 ITEPA 2003 ensure that no car or van benefit arises on a pooled car or van made available by reason of the employment that, in the relevant tax year, satisfies all the following conditions:

  1. it was made available to, and actually used by, more than one of those employees
  2. it was made available, in the case of each of those employees, by reason of the employee’s employment
  3. it was not ordinarily used by one of those employees to the exclusion of the others
  4. in the case of each of those employees, any private use of it made by the employee was merely incidental to the employee’s other use of it in that year (see EIM23455), and
  5. it was not normally kept overnight on or in the vicinity of any residential premises where any of the employees was residing, except while being kept overnight on premises occupied by the person making it available to them (see EIM23465).

For the purpose of these five conditions all employees should be considered, including those in excluded employments, who would not be chargeable to tax even if the car or van were available for their private use.

The conditions to be met are essentially questions of fact. Each of them has to be considered in turn. It is not enough that a car satisfies any four of them and narrowly fails the fifth. It must satisfy all five conditions. All the relevant facts should be obtained, preferably by way of interview, before a decision is taken.

For the meaning of private use and business travel see EIM23305.

An Inspector should consider any claim that a car or van is a pooled car or van if you are in doubt. If doubts persists, see EIM23470.

As regards vans that are not pooled vans see EIM22700 onwards for years from 2005/06 and EIM22050 for earlier years.

As regards the apportionment of the car benefit and car fuel scale charges in cases where pool car status does not apply, see EIM25200.