Principal Issues: Position of CRA regarding the use of field vehicles for travel between the employee's home and place of business..
Position: The CRA's current position is that getting to work is a personal responsibility, so the employee should bear the cost.
Reasons: Consistent with longstanding position based on jurisprudence and tax policy.
Question 14 - Vehicle Benefits
There have been a number of recent court cases (e.g., James MacMillan v. The Queen, 2005 T.C.C., Timothy Fox and Brian Richardson v. the Queen, 2003 T.C.C., and Donald Anderson, Robert Auckland, Howard Harder, Wyatt Penner and Keith Scott v. The Queen, 2002 T.C.C.) where it was decided that employees using field vehicles did not have any personal use of the vehicles when driving to (from) home from (to) their place of business. Generally, the employer viewed all use of the vehicle to be necessary in its business and prohibited personal use of the vehicle. Would CRA please comment on its position regarding the use of such vehicles for travel between the employee's home and place of business? Does the Agency's answer change if the vehicles meet the definition of "automobile" for income tax purposes?
Response
The CRA's current position is that getting to work is a personal responsibility, so the employee should bear the cost. An employee who uses an employer-provided motor vehicle to travel between home and work, without paying for the use, has received a benefit, notwithstanding the conditions of employment that require the employee to take the vehicle home.
We recognize that there are a number of recent informal TCC decisions that have held otherwise in certain situations and as a result, we are currently reviewing our position. Our goal is to develop a position that respects the tax policy objective that travelling to and from work is personal but recognizes that there are often restrictions placed on employees that limit their ability to choose whether or not to use the employer's vehicle.
The CRA's position does not change if the vehicle is not an automobile. The only impact is how the benefit is calculated: a standby charge for automobiles or a reasonable estimate of the fair market value based on personal use for other vehicles. It is also worth noting that the personal use of a van, pick-up truck or a similar vehicle in the taxation year in which it is acquired or leased, will impact the determination of whether that vehicle is an automobile.