9. Fringe benefit ‘No value’ concessions
The fringe benefit value of the private use of a company car is deemed to be nil for two circumstances –
1. ‘Pool cars’ and
2. ‘Standby vehicles’.
‘Pool Cars’
The value of the private use of the motor vehicle by an employee is deemed to be nil (i.e., no fringe benefit value and no PAYE), if all three of the following conditions are satisfied:
1. The motor vehicle is used by employees in general for business travel and is not allocated to a particular employee, and
2. Private use of the motor vehicle by the employee is “infrequent or merely incidental to business use”, and
3. The motor vehicle is not normally kept at or near the residence of the employee when not in use outside of business hours.
‘Pool cars’ are vehicles owned or rented by the employer that are made available to employees in general (i.e., not allocated to one employee for exclusive use) for business travel during working hours.
In the normal course of events, the vehicles are used during the day for business purposes, returned to the employer during or at the end of the day, and parked at the employer’s premises while the employee travels home by his own means.
Occasionally, the day’s business trips are extended beyond normal working hours, and for practical reasons, the employee takes the pool car home.
The difficulty in applying the ‘no value’ concession is because of the rather convoluted wording of the third condition. The interpretation of this point is that the vehicle can be kept at the employee’s residence only when it has been used for business purposes outside of normal hours.
If this is the case, then the ‘no value’ concession will still apply.
Taxable Scenario
An employee has a temporary problem because his own vehicle is in the garage for repairs, and the employer allows the employee to use a ‘pool car’ to travel from work to home and back again while his car is in the garage.
In this case, point 3 is not complied with because there is no business use outside of business hours to justify the use of the vehicle to go home, yet it is used for this private travel.
Result: A pro rata portion of the fringe benefit value for a full month of the private use must be calculated.
‘Standby’ or ‘Tool of Trade’ Vehicles
The value of private use of the motor vehicle by an employee is deemed to be nil, if –
1. The nature of the employee’s duties is such that the employee is regularly required to use the motor vehicle for the performance of those duties outside normal hours of work; and

2. The employee is not permitted to use that motor vehicle for private purposes other than –
• Travelling between his or her place of residence and his or her place of work; or
• Private use which is infrequent or is merely incidental to its business use.
This ‘nil value’ concession assists the users of vehicles that are regularly used for work outside of normal working hours, and where the private use (other than from home to work), is infrequent or incidental to the business use.
Note that:
1. ‘Normal working hours’ are the hours of the employee who has the right of use of the vehicle, and can therefore vary for different employees
2. The use outside of an employee’s normal working hours must occur regularly – occasional use will not be frequent enough to constitute regular use.
The last requirement is the difficult one:
The private use (excluding travel from the usual place of residence to the usual place of employment) must be
“… infrequent or merely incidental to its business use”.
It is the employer’s responsibility to prove that the requirements for the nil value provisions have been met.