I've just acquiried a new client, who either isn't terribly bright, or is trying to be clever and not doing it very well. They started up a limited company and needed a van (which they have represented is 100% business use). When I come to look at the finance lease however, it is in the name of one of the directors parents. This individual is neither a shareholder or employee of the company. I've confirmed that the vehicle itself is registered in the name of the company. It is paid through the companies bank account.
For the accounting treatment I'm reasonably happy. Commercial substance over legal form. Put the lease on the balance sheet and (my judgement) classify it as due withing 1 year since they havn't put the correct details on the form.
The corporation tax issue is however more difficult. The lease isn't in the name of an officer of the company which means an expense claim would be difficult. You could charge rent from the parent to the company but that seems like an extremely round about way of doing things, especially given the lease payments themselves are made out of the companies bank account.
There seems to be guidance on the situation where landlords create a lease to directors personally, but this seems to be in relation to VAT and directors, rather than to the current situation.
Does anyone else have experience of a similar mess to this?