Company Car or Not?

Company Car or Not?

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Apologies in advance for being longwinded.

Client currently undergoing paye inspection. All issues resolved except co.car.

Client for operational reasons uses his personal accounts for business purposes.
Company account pays minimal expenses.

Wife is company secretary, minority shareholder, has her own job and receives no salary etc from company.

Car 1 purchased for wife using personal funds (registered with DVLA in company and wife's name).

Car 2; Purchased using company cheque and trade in.(do not know registration details as yet)

Both cars on advice of previous agent were included on balance sheet.

Director has now purchased car at "market value"

There was never any intention by client to have company car.

My stance is that a genuine error has been made, because personal and business expenditure have been "mixed up", by including car on balance sheet.

HMRC have already conceded (on other points) that there has been difficulty in identifying business and personal expenditure.

HMRC naturally want company car benefit charge and because I have been stubborn have threatened to take case to Commissioners.

Any suggestions would be most appreciated.

Anon

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By jvenegas16
13th Jun 2007 13:53

company car benefit?
From the facts I can say that if there were not benefits claimed on the cars, there should not be any issue on that.

What it seems to call the attention of the Revenue is the mixed-up of the accounts and expenditure.

However, if capital allowances have been claimed on the cars, they are going to be treated as company cars and a benefit in the use of the cars has arisen.

For further discussion:

[email protected]

Juan Carlos Venegas

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