Hi guys,
There is a client claiming that he has to take all of his employees to work everyday 5 day a week, so he wants to claim vehicle expense for this. My question is if the business claims this as expense, then shouldn’t the employees be taxed on it as taxable benefits?
Makes sense to me. Driving from home to work for an employee is considered personal. Even if one hires a taxi to go to work it would be considered personal.
I think another question is whether the CRA or the courts would argue if the driving by the employer is considered business or not.
Google …Taxable Benefits Chart… It clearly states it is a benefit.
Although, I have never enforced it… because I have never been apprised that anyone does it.
Way back…like 20 years ago… A painting contractor had to pick up his employees or he would have none/ might be the same scenario you are encountering… still doesn’t change the rules tho.
@rachelavryl Not sure I agree entirely on that…but might be fact-dependent. I did have a client who picked up 'ees either at home or at a designated spot and then drove them to their worksite for the day (which varied). Think I can make the case for that being deductible on the basis of “for the purpose of gaining or producing income” (ie hard to do if the people don’t show up…or can’t get to ugly locations).
Not a likely claim if just going to an office daily.
And…I seem to vaguely recall a tax case dealing with auditors’ remote-location daily travel (possibly ironically) where it was allowed. Would have to look that one up.
We have a decent sized roofing contractor that picks up their employees each morning. They have a 10 or 12 passenger Ford transit they use to round everyone up. Most of the employees don’t have driver’s licences (DUI cases for the most part). The contractor claims the same as you SmallBizGuy, that if he doesn’t pick them up nobody shows up to the job sites.
He also says he never schedules any big jobs for Thursdays. He says for some strange reason “court appearances” usually take place on Thursday’s. 
They had a CRA vehicle expense review last year and nothing was challenged… no taxable benefits, no changes made to the claim. But of course… I’m not sure those vehicle review projects really count as audits.
Chicken and Turkey catchers operate much the same here too. The catching vans pick up all the catchers and deliver them to the job site.
What about the farmers with refurbished school busses that transport their large crew of migrant workers to the grocery store on Friday nights to pick up groceries for the week?
Payday is Friday I would bet also. 
Along with what has been posted already, I’d say - be sure you get all the details straight. For example:
As for as it being taxable to the employees, how would you calculate the benefit amount? It would be difficult to determine based on mileage because some employees may be further away than others, and the driver is not going back to the office after each address, is he? (that is, I imagine he’s driving to one house, then the next, then the next, etc until he has them all, then back to the office).
Also, as mentioned by @SmallBizGuy - CRA will likely look at it differently depending whether the driver is STARTING at the office or not. That is, if he is starting from HIS home, and going directly to another employee’s house, he’s technically still on HIS way to work, which is not a deductible expense. I heard of a tax court case where something like this was argued and the taxpayer won, but if he wants to avoid a fight with CRA, he should probably drive to the office first, pick up a vehicle owned by the business, then drive around and pick up employees.