Any tax related information is meant as a reference only.1
HMRC regularly issues penalties for businesses who fail to comply with its rules, in line with the potential tax revenue lost, and the degree of responsibility or guilt.
Susan has been driving a company car for the previous six years, which was reported on her employer’s 11D form, and as such, she has paid all necessary taxes, with the company paying National Insurance charges on time.
However, Susan’s employer did not report fuel provided for private journeys, as they did not have sufficient controls in place, such as a vehicle log book, to distinguish between private and business fuel. The car is diesel-powered and has emissions of 170g/km.
The maximum penalty to Susan's employer can be up to 100% of the unpaid tax and NIC due to a failure to report the benefit in kind. However, in practice we expect the penalty position to be in region of 30%.
With proper forward planning and the right controls in place, Susan and her employer could have avoided these penalties.