CAN using a daily rental car qualify for benefit-in-kind taxation? Yes it can – there’s no minimum period.
If an employee has private use of a rental vehicle, even if it is for just one day, then strictly speaking they would have to pay benefit-in-kind company car tax.
The trigger for a company car tax charge is simply that a car has been made available for private use. Any payments made by the employee towards private use can be deducted from the resulting charge.
So, if an employee has a rental vehicle delivered in the evening for a meeting first thing next day and the employee uses the vehicle that evening for private use, then tax would be payable. The employer can assist by making it clear to the employee that private use is not permitted.
The enforceability of this would be down to the employer and not the provider of the rental vehicle.
Of course if the rental vehicle is merely a replacement vehicle (ie the employee has a company car, but it is being repaired or serviced) then the employee does not need to declare details of the rental vehicle, if the rental period is less than 28 days.
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