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As a result of further discussions with the trade bodies, HMRC have identified a significant simplification to the proposals on car averaging arrangements published in October 2008.
This is incorporated in the revised version of the guidance to be included in HMRC’s Employment Income Manual.
The original version required employers to identify the cars available to their employees for private use at each location, to allocate those cars to groups and then to calculate the average car in each group from the cars in each location.
The simplification is in the calculation of the averages for each group.
Instead of requiring that this be done location by location, employers can instead calculate the average using all the cars identified at Step 1 (EIM23656) on a national basis (or regional, if they are so organised and prefer this option) rather than at each location.
It will still be necessary for such groups to identify how many cars in each group are at which location because this affects the cars actually available to employees at that location.
As a result, a group with (say) 50 locations split into four regional operating groups will not need to do 50 separate calculations.
Instead, they can either do one or four at their discretion.
The changes affect the following pages of the manual: EIM23656, EIM23658, EIM23662, EIM23663, EIM23665 and EIM23666.
