Furloughed employees with a company car sat on the driveway could save thousands of pounds in tax by giving it back to their employer.
Up to 11 million people are expected to be furloughed by the end of the lockdown, according to experts, with businesses applying for help paying a million workers on the first day of the scheme.
The Government-backed initiative covers 80pc of wages of up to £2,500 for staff on leave for April, May and June. Employers can top up pay packets, but do not have to. The sudden drop in salary will hit hard for those with little savings and high outgoings.
One way those on furlough could cut costs is to return a company car to their employer so that the vehicle is not available to them for private use.
Around a million cars and vans are arranged by employers for their staff. Not only do employees get a new car, but insurance is typically covered by the business who often provide a fuel allowance.
Employees that have a company car incur a "taxable benefit" when a vehicle is made available for private journeys. The amount owed depends on a range of factors, including the cost of the car and the vehicle’s carbon emissions and can run into the thousands of pounds.
A car kept on an employee’s driveway during a period of furlough would still be considered available, even if it had a statutory off-road notification (SORN).
John Hood of Moore Kingston Smith, an accountancy firm, said: “If the car is not available for 30 consecutive days or more, the benefit tax can be reduced.”
For example, someone with a car worth £34,550 and carbon emissions of 132g/km – the average for a two-litre diesel engine company car – be liable to pay tax on a sum of £11,402. A basic-rate, 20pc, taxpayer would be charged around £190 a month, plus £134 for private fuel.
A higher-rate, 40pc, taxpayer with the same car would pay £380 per month and a further £269 for private fuel.
Handing back the keys to their employer, could easily save a higher-rate payer thousands of pounds a year.
“With many people facing genuine financial hardship at present, it would make sense for Her Majesty’s Revenue and Customs (HMRC) to offer to relax the rules around company cars,” Mr Hood said.
三级成人视频It would be at the discretion of the employer as to whether the car is returned to the employee after the lockdown.
A spokesman for HMRC said: “Ordinarily, we would expect that the car is handed back to the employer so that it cannot be used.
三级成人视频“However, we recognise that under the current circumstances it may not be possible to hand the car itself back, so exceptionally, we would accept that where all the keys (or tabs) are in possession of the employer, and the employee does not have the authority to request the keys are returned to them, the car would be unavailable.”