Do you provide a pool car for your employees?

The tax treatment of company cars is such that it is often very beneficial to argue that a car is a ‘pool car’. This generally means that no individual employee is taxed on a benefit in kind for the car. However, if you want this treatment it is vital that you meet the conditions for this treatment, two important of these are that it is not ordinarily used by one employee and that it is not normally kept at or near the residence of an employee. Even if you meet these rules and treat the car as a pool car, it is still almost impossible for a normal business (not a taxi/car hire/driving school/car sales business) to reclaim the VAT on a car (as opposed to a van) – the VAT conditions are based around the car not being ‘available’ for private use, a very strict test.