JULY 4 1988
J.D. Jones (613)957-2104 Dear XXXX
Re: Standby Charge for Automobile
This is in reply to your letter of May 5, 1988 in which you requested our opinion as to whether or not a standby charge for an automobile is applicable where the vehicle is not made available for personal use as well as the types of records to be kept in order to verify the use of the vehicle.
It is our understanding that the facts in your particular situation may be summarized as follows:
XXXX (the "company") owns a vehicle which is made available for your use but which is used by you for business purposes only. The company has passed a resolution stating that company vehicles are not available for personal use.
The computation of a standby charge for an automobile has application where an employer or a person related to the employer made an automobile available (whether or not for personal use) to an employee or a person related to an employee.
The standby charge is adjusted by the percentage that the actual non- business kilometres are of 1,000 for each thirty days the automobile is available. Consequently, a standby charge must be calculated even where there is minimal personal use of the automobile.
In your situation, as described above, in order to eliminate the standby charge based upon no personal use of the automobile, form IDS "Application for Reduction of the Automobile Standby charge" copy enclosed) must be filed with the company to confirm the period of time an automobile was made available and to declare the number of total kilometres driven during that period.
With respect to the types of records which should be kept, we have enclosed the Department's Information Circular, IC 78-10R regarding books and records. We would draw your attention to paragraph 4.
In your particular situation, you may wish to keep a daily log book recording the mileage driven when the vehicle is used. This log should indicate the date, point of origin and point of destination and the mileage travelled. We would also point out that the Department considers personal use to include travel between the employee's place of work and home even though the employee may have to return to work after regular duty hours. An exception to this view occurs, however, where the employer requires or allows the employee to proceed directly from home to a point of call other than the employer's place of business to which the employee reports regularly, or to return home from such a point. These particular trips are not considered to be of a personal nature. We have also enclosed the Department's Interpretation Bulletin, IT-63R2 on the subject of automobile benefits including the standby charge.
We trust the foregoing will be of some assistance.
Yours truly,
ORIGINAL SIGNED BY
P.D.FUOCO for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch