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Cars in Partnerships

A partnership (husband and wife) provide a car to their son (who is employed by the partnership). The employer pays for everything including private fuel and the son complete a large amount of busimess mileage.

Does anyone have any bright ideas so that the car benefit in kind charge does not apply?

Many thanks - i know I'm pushing my luck!
Emma

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05th Dec 2006 10:35

Make him a partner?
.....might save some NIC too. (Of course all the non-tax implications would have to be considered)

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By Anonymous
04th Dec 2006 19:03

Look for a concession
It is my understanding that concession exists to the effect that a "benefit" provided to a family member because of a personal relationship might not be chargeable as a benefit it in kind providing that the business income tax computations alternatively disallow a private proportion to reflect expenditure incurred by the business in effect incurred partly for private (family) reasons.

I suggest you search for the existence of the relevant concession.

If, as an alternative the car is viewed as chargeable to a benefit in kind, it follows that NO PRIVATE USE ADD BACK is applicable in the partnership tax computations, this means identifying the running costs for the car concerned and ensuring the partners' private use add back is NOT applied to the BIK car.

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By neileg
06th Dec 2006 13:25

No
The facts suggest that the son is a working employee of the partnership. It appears that this is genuinely a company car and caught by the BIK rules. Since there is private mileage it follows that a BIK arises.

I would urge caution about considering making the son a partner if the only motive is to avoid the BIK.

You could consider the son providing his own car and paying the approved mileage rates.

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