Car provided by third party

Car provided by third party

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Hello

Scenario. 

Director/sole shareholder of company, (no PAYE scheme) provides management services to three/four other businesses.

One of his customers has provided a car for him to help him perform his duties.

For tax purposes ?

1. Should the providing company, the third party, prepare a P11D under their PAYE scheme, even though he is not a deemed employee, and account for Class 1a etc etc.?

2. Provision of benefits by someone other than the employer (From the expenses guide)

Section 201(2) 1.25 Benefits provided for employees (or members of their families or households) by reason of their
Section 209 employment by someone other than their employer are taxable in the same way as if they had
been provided by their employer.
 
Should he apply for a PAYE scheme for his own company and prepare form P11D etc based on the above?
 
3. Employment income provided through third parties ('Disguised remuneration’ rules). Does this apply here?
 
Your thoughts would be most appreciated.

Replies (2)

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By eastangliantaxadvisor
28th Feb 2013 20:14

I would say there are several points:-

 

1. Sales in the accounts should be at "fair value" - I would therefore consider that the Limited company, by which he is employed, should show this in turnover. The cost would be the cost of the car so the tranaction would cancel out!

 

2. As you have noted, the car is being provided to the director. If it is available for private use then a P11d benefit will arise. Therefore a PAYE scheme and P11d will be due.

Thanks (1)
By Democratus
01st Mar 2013 09:33

it's been a while

Can't remember the reference now but there certainly was a requirement for the supplier of the car (i believe this might be as a gift) to account for the Ers NIC on it and the receiver the tax. If i can find it I'll repost.

Thanks (1)