Yes, HMRC should be notified on form P46(Car) when an employer provides an employee with a car which is available for private use. Notification should be made within 28 days of the end of the quarter to 5 July, October, January or April. HMRC will then issue the employee with a new tax code.
The details of the car and benefit charge should also be included on the end of year form P11D, along with any other benefits and expenses.
There is an exception to this if the employee concerned is not a director and earns less than £8,500 per annum (including the value of any benefits or expenses, i.e. including the car).
If you would like to discuss benefits and expenses further, please feel free to contact your local TaxAssist Accountant.