HM Revenue & Customs (HMRC) has confirmed that it will still not accept the P46 (Car) form, which details replacement company car details.

However, it has confirmed that from April 2011 fleet managers will be able to notify HMRC electronically of any replacement car changes.

In April 2009, HMRC said employers no longer had to submit the form and that from April this year the form would no longer be accepted.

However, concerns were raised by some employers that this may lead to company drivers paying the wrong level of tax, which led to HMRC creating a working group. Despite meeting with the industry, HMRC has confirmed that it cannot make changes for the current tax year, so the form still will not be accepted.

“This is something fleets need to be aware of,” said company car tax expert Alastair Kendrick. “With the cancelling of the P46 form we need this procedure to avoid employees finding themselves with a tax underpayment. The question is whether HMRC will apply penalties to those employers who do not use this system. Employers need to consider this matter with care to avoid their employees finding they have a tax underpayment.”

ACFO said it welcomes HMRC’s interaction with the industry: “It was obviously a concern for some employer/employees and it is good that HMRC has listened, taken on board these concerns and come up with a way for those people who wish to report replacements electronically,” said ACFO chairman Julie Jenner.

“Remember this only applies to P46s for replacement cars not those employees who go into a car for the first time or come out of a car.”

For best practice and legal advice, have a look at the fleet news legal section for more information.

More articles on: