It’s called a pool car, because it is an asset that can be used by everyone in that organisation: ‘pooled use’.
However, HMRC is very keen to ensure that employees don’t use pool cars and vans as their regular company vehicles in an attempt to sidestep company car tax.
Therefore, to be treated as a pool car or van the vehicle has to be:
- available by reason of employment to more than one driver.
- actually used by more than one driver.
- must not ‘normally’ be kept overnight at one employee’s home.
A certain amount of private use is allowed if it is ‘incidental’ to the business use.
For example, if the car or van were to be taken home to allow an early start on a business trip.
If, however, there were frequent uses of this type, it would be treated as a company car or van and benefit in kind company car tax would be liable. The employer would also be liable for class 1A national insurance contributions on the benefit, too.
So a pool car must remain just that – a vehicle that stays at work for business use only. If you are an employee you should ensure that:
- Accurate records of the pool car’s use are kept – a sign out the key, sign back in is a minimum;
- The pool car is taxed and insured for business use;
- The pool car is regularly inspected for condition (tyres, oil, fluids, and so on) and generally meets duty of care standards
The same points cover a pool van, too.
What about shared use of a company car?
More on this on page 2