From: Ronald Raygun 
Subject: Re: Company Car ?
Newsgroups: uk.finance
Date: Fri, 16 Dec 2005 18:11:06 GMT

Tim wrote:

>> "Tim" wrote:
>> > If your employer were to charge you for the car (and
>> > not charging you is what gives rise to a "benefit"),
>>
> "Ronald Raygun" wrote
>> This is not true.
> 
> Yes it is!
> 
> "Ronald Raygun" wrote
>> "Not charging" is not what gives rise to the benefit,
>> because charging does not cancel the benefit.
> 
> Of course it cancels it.  If the "taxable benefit" is
> deemed to be £3500, and the employee is actually
> charged £3500, then there is NO "taxable benefit"!

But if the TB is £3500 and the employer charges you £2500, say,
there is still a benefit.  Hence there has been charging and
it has not cancelled the benefit, but only part of it.

> "Ronald Raygun" wrote
>> If the employee pays market mileage rates
>> for private use, this does not stop the benefit
>> being taxable, all it does is reduce the
>> chargeable benefit by the mileage payments.
> 
> That simply shows that the "taxable benefit" (prescribed by law) and the
> "true benefit" (market rates) are different.
> 
> What actually gives rise to the "taxable benefit", is that the employee is
> given something deemed to have a value £X and not being charged £X for it!

Indeed.  So it isn't "not charging", but "not charging enough" which
gives rise to the benefit.