Pool car – benefits
Are you looking to purchase a car for your employees to use for business trips? You can capitalise on income tax and national insurance tax relief if you provide cars to your employees through a qualifying pool car arrangement. This will ensure there are no adverse tax consequences for your you and your employees when they have use of the car.
Pool car – conditions to qualify
In order for a pool car arrangement to qualify for the above-mentioned reliefs, the following conditions must be met:
- The cars are only used in the business by different employees. The car must be made available to, and actually used by, more than one employee and cannot be used by one employee to the exclusion of others.
- Any private usage of the car by an employee must be no more than incidental (i.e. a lunch stop).
- A pool car cannot be kept at an employee’s house overnight.
Further considerations
We suggest that when pool cars are introduced into a company, a written policy regarding the use of the cars is implemented and this policy is re-visited frequently to ensure it reflects how the pool cars are actually being used within the company.
We’re here to help you
If you would like to discuss pool cars in more detail, or if you have any questions regarding business tax, please contact us – we’re here to help you.