Fleet News

'Buying abroad won't provide tax loophole'

FLEET drivers hoping to cut their benefit-in-kind tax bills by sourcing company cars overseas are going to be disappointed. With company car tax based on the official list price of a car, some drivers have expressed the hope that, by purchasing a car in a cheaper market, they could use the foreign list price as a basis for their P11D calculations.

This could have potentially halved drivers tax bills, with European Commission figures showing that pre-tax prices of cars such as the Ford Mondeo were 58% cheaper in some EC member states than in the UK. However, the fine print of Inland Revenue Booklet 480 'Expenses and Benefits, a Tax Guide' lays out clear guidelines for the taxation of cars wherever they are acquired.

These state that, if the car has an identical equivalent in the UK, the manufacturer's UK list price will apply. And where the relevant car does not have a list price, its notional price is used instead.

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