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HMRC internal manual

Employment Income Manual

Car benefit: special cases: employees with frequent changes of car (from 2009/10): procedures and record-keeping

Employers will need to keep the following records about the cars:

  • cars available to employees for private use as determined in the sample taken to determine the notional cars for that tax year
  • price for each car, i.e. list price plus accessories, including VAT
  • CO2 emissions and fuel for each car
  • the groups to which the cars were allocated
  • the number of cars in each group at each location
  • the car benefit charge for each group and how this was calculated

and these about the employees:

  • list of employees entitled to use those cars in the tax year
  • group to which each employee is allocated
  • why that employee (or group of employees) was allocated to that group
  • dates on which new employees join or current employees leave
  • any employee who changes group in a year, with the date of change

Failure to do so may result in HMRC taking action to recover car (and, if appropriate, car fuel benefit) on the statutory basis, both for future and past years.

Form P11D

Form P11D should be completed annually with the relevant details for each employee. It will only be necessary to report two cars for an employee where that employee changes groups in the year.

Form P46(car)

Forms P46(Car) will only be necessary when an employee joins or leaves the employment. No form will be necessary if an employee changes groups, whether in year or between years.

Other administrative points

See EIM23815 about the right of employees to have their benefit calculated on the statutory basis.

See EIM23820 about claims to special treatment.

2008/09 and earlier years

This guidance applies only for 2009/10 and later years. Local arrangements applied for years to 2008/09 as described at EIM23750 onwards.