Pooled cars

Pooled cars

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Section 167 ITEPA 2003
http://www.opsi.gov.uk/acts/acts2003/30001--p.htm#167
is a relieving provision that effectively states that a BIK charge under s.114 (car benefit) http://www.opsi.gov.uk/acts/acts2003/30001--p.htm#114
will not arise if certain conditions are met ("pooled car"). I think it follows that the relieving provisions in s.167 need not be considered relevant if no charge under s.114 arises in the first place.

I am considering a situation where the condition stated in s.167(c)(3) (not normally used by one employee) is arguably not satisfied but all other conditions of s.167 are satisfied and the car is not made available for the private use of any individual (nor actually used privately). Indeed it would be used by several employees, but probably more by one particular employee than others, albeit only on business use.

This being the case, it seems to me that the condition in s.167(c)(3) is redundant. All of the other conditions in s.167 combined, if satisfied to the exclusion of (c)(3), would appear to be sufficient to bring the circumstances outside the scope of s.114, rendering relief under s.167 unnecessary.

What am I missing, please?
Clint Westwood

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Rebecca Benneyworth profile image
By Rebecca Benneyworth
04th Jan 2007 20:43

Not taxing use
Clint, your problem with logic probably arises because a tax charge does not arise on the *use* of the car, but the fact that it is *available* for private use, whether in fact used or not. This is why the legislation works in the way that it does.

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By neileg
04th Jan 2007 10:12

I see what you mean
It does seem to be redundant.

I'm not clear on how the legislation impacts on the case where one employee uses a car all the time, but not for private use. Logic suggests that there is no BIK, but logic has nothing to do with tax!

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By AnonymousUser
04th Jan 2007 10:46

I don't see what you mean
For a car to be treated as a pool car, all the conditions of s.167(3) have to be satisfied. If a car is made available to 10 employees, but one of them uses it for 50 weeks of the year, and the others use it for the remaining 2 weeks, I think the Revenue would argue that it is ordinarily used by one of the employees to the exclusion of the others. (The problem is - what do they actually mean by "ordinarily"?).

If 3(c) is failed, the 167 exception does not apply and BIKs will apply to all employees to whom the car is available for private use (so used or not) - but apportioned on a just and reasonable basis.

The starting point is s.114 - is the car available for private use? The answer is yes or no - you do not rely upon s.167 to determine this. (167(3)(a),(b),(d) and (e) may all be satisfied but if the car is available for private use, s.114 is still in point.)

If yes to s.114, then a BIK arises, UNLESS s.167 applies and it is only at this stage you consider s.167. If any of the conditions in subs.3 are failed, the BIK remains. Seems straightforward to me!

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By AnonymousUser
05th Jan 2007 22:31

Thanks all
I was aware of the distinction between actual use and available for use, but I had mistakenly concluded that compliance with all of the terms of s. 167 effectively excluded availability for private use. I see that I was wrong on that.

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