On the topic of company cars, it should be remembered that as we head into a new tax year, the flat-rate figures used in the computation of some employer-provided vehicle benefits-in-kind calculations will be increased for inflation. From 6 April 2026:

  • The flat-rate van benefit charge will be increased from £4,020 to £4,170.
  • The flat-rate van fuel benefit charge will be increased from £769 to £798.
  • The multiplier for the car fuel benefit charge will be increased from £28,200 to £29,200.

Where an employer provides an employee or a director with a company car, this is usually a taxable benefit-in-kind. The taxable amount of the benefit depends on the vehicle’s power supply, its manufacturer’s list price and CO2 emissions. A reduction is given for any periods where the car is unavailable.

Pool cars owned by the employer and used by a number of employees will not normally lead to a taxable benefit-in-kind. Certain conditions need to be met, including the car only having very low or incidental private use and it being used by different employees, none of whom normally take it home at night.

Great care needs to be taken with company vehicles and tax. Indeed, in a recent tax tribunal case, a company director learned this lesson the hard way, after relying on an informal agreement reached with HMRC over 25 years earlier. In MWL International Ltd and Maywal Ltd v HMRC [2026], the business had treated a number of cars as pool cars and reported no benefit in kind for over two decades. During a later PAYE audit, HMRC decided the vehicles did not genuinely qualify as pool cars because the conditions had not been properly met. Significant National Insurance bills then followed. The company fought back but the Upper Tribunal ruled that HMRC cannot be prevented from applying the correct tax rules, regardless of any past informal agreement.

The case is a stark reminder that a vehicle must genuinely satisfy all of the pool car conditions in practice, not just on paper, and that an informal nod from HMRC, however long ago, offers no lasting protection.