An important change to the way employers notify HM Revenue & Customs (HMRC) about replacement company cars will take effect from April 2011.
From April, employers will be able to notify HMRC electronically of any replacement car changes and only notifications received in this way will be accepted.
Options for electronic filing include HMRC’s free Online Return and Forms – PAYE service, available via its website.
HMRC had previously announced that from April 2009, employers no longer had to submit form P46 (Car) for replacement company car changes and that from April 2010, forms P46 (Car) relating to such changes would no longer be accepted.
The reintroduction of notification of replacement company car changes has followed representations to HMRC about the impact of scrapping the measure, which could potentially affect the tax position of an employee in the tax year the change occurred.
It meant that the employee’s tax code was only changed after the relevant P11D taxable benefits and expenses form was filed in the new tax year.