We’ve been asked quite a few questions during the Covid-19 Government shut down, but the question we have been asked the most is: if furloughed can you get a rebate on company car tax? We ask this and a few more questions on AE Answers.
If you have been furloughed by your employer and have a company car which you would usually pay benefit in kind tax on, then HMRC have released a few guidelines.
If your employer has told you not to drive the car and park the vehicle up, but you still have the ability to drive the car, such as; you have possession of the keys. The you are still liable to pay company car tax, even if the wheels don’t move.
If your employer has furloughed you and have taken the keys from yourself but the car is still waiting to be picked up, then you are not liable to pay benefit in kind on your company car. In this instance you should be able to get a rebate of Benefit in Kind company car tax.
If your employer has asked you not to drive your company car during your furlough period, but has not restricted access to the vehicle eg. taken away your keys. Then you are still liable for company car tax.
We would suggest to send your keys back to your employer via recorded post and inform HMRC.
If you have still got the car and have access to the vehicle which includes keys, fobs or cards, then you will still be liable for company car tax at the standard rates.
The existing scheme introduced by the government for employers to furlough their employers, does not allow any undertaking of work whilst they are on furlough.
From 6th April 2020, if you choose a fully electric vehicle such as the Tesla Model 3 or the BMW i3, you will pay no company car tax during the 2020 to 2021 tax year.
- Do I still need to pay Company Car tax whilst furloughed or working from home?
- HMRC Benefits & Expenses during Furlough Period