The handing back of company car and van keys or fobs to employers in order to avoid benefit-in-kind taxation during the coronavirus lockdown needs careful management, the Association of Fleet Professionals has warned.
There remained both pertinent questions for HMRC around the issue and a range of potential practical problems to resolve, explained co-chair Caroline Sandall.
She said, “During lockdown, there are many people facing potential hardship and being able to avoid benefit-in-kind could make a genuine difference to some. While it has been established in principle with HMRC that key handback is a definite option, there are some points on which we remain unclear.
“The main immediate problem that needs to be avoided is employees simply pushing their keys back through the letterboxes of unattended offices, something of which we have heard several reports. For your employer and HMRC, this doesn’t create an audit trail showing when the key was returned or to who, which is something that may need to be ultimately established to the satisfaction of either or both.
“It also creates a possible fleet management problem for the future. If you run a single or limited badge fleet, you could find yourself with a pile of identical keys and no means of working out how to link them to a particular vehicle. Plus, there is quite a high probability that keys will be lost and replacing them is always expensive.”
Caroline added that there also needed to be questions considered about where company cars were being left while they are being unused.
“There is a health and safety issue here. Clearly, no employee should be leaving their car or van on the road if they don’t have the keys because they may need to move it in an emergency. Even if it is parked on their drive, they may still require urgent access.
“If the vehicle is being parked or stored elsewhere, then security becomes a concern, as does its ongoing condition. There is certainly an argument for the car or van to be properly inspected before it is accepted as being handed back, and that regular checks afterwards are needed.
“Finally, if the crisis situation persists for some months, as seems not unlikely, then you should consider the usual issues surrounding long-term vehicle storage, from flat batteries to seized brakes. All of these matters should be examined by fleet managers.”
The Association of Fleet Professionals had been discussing the issue of benefit-in-kind taxation during the lockdown in recent days with several interested parties, Caroline said, talking about the best approaches to both HMRC and the management of the issue.
“While we definitely believe that employers should be facilitating key handback for those who want to take that option, it is a subject that requires careful management and potentially, further guidance from HMRC, including questions around related areas such as benefit-in-kind on fuel.
“Certainly, it would be useful to be having a dialogue with HMRC to make certain matters clear so that compliant procedures can be established by fleets. We’re happy to act as the lead body on this subject in conversations with the authorities. However, we are also sensitive to the fact that the authorities have more important matters to which they are attending.”