A taxpayer recently tried to argue before the Tribunal that because he could not drive he could not be said to have a car available to him for private use, but the Tribunal pointed out the following:
“This argument ignores the fact that the charge under the benefits code…applies because an asset is made available or placed at the disposal of the employee or director. There is no provision for a reduction in the cash equivalent or annual value of a car…because the employee or director does not have a licence or competency to use them unassisted.”
The taxpayer has entered into a contrived sub-leasing arrangement with a local Chauffeur firm, with the car being leased by the company, and the Chauffeur being retained on a permanent basis to drive the taxpayer from home to work and back.
However, as the Tribunal pointed out, HMRC missed a trick concerning the provision of a Chauffeur as a benefit in addition to the car:
“The fact that the employee or director does not drive raises instead the question of additional tax charges on the benefit of services of a Chauffeur. It is not clear why HMRC chose not to pursue this charge.”
The office was only a 10 minutes walk from home…
Article by Simon Howley ATT CTA ATA AFA MIPA