Company Finance lease / HP but in the name of the wrong person
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?
- VAT On Conference Sponsorship 14 1
- Loan to realted parties 53 2
- monthly payments 166 3
- Related party disclosures 43 2
- Errors in prior year accounts 406 10
- Loan from one LTD co. to another LTd Co. 50 1
- Hive up - accounting and notes to financial statements 139 2
- Free Shares ? 48 1
- Are pre trading lossess able to be off set if the company does not trade? 195 3
- Coding notices post P11d 1,912 16
- Any point writing to HMRC to appeal against self assessment penalties ? 555 15
- Tick & Bash Bristol 431 7
- IFA incorporation 360 1
- VAT on Training Courses 197 5
- Consolidated Accounts Software 173 2
- Do I need to pay Capital Gain Tax 632 26
- Peer to Peer lending 254 6
- Client Death 295 3
- Filing Dormant LLPs with Companies House 133 2
- Fixed Assets 332 6
- Proposed Amendments to IAS 1 588
- Property exchange - 8-year legal delay following fall-out 458
- Accounting for Insurance Premium Financing 359
- Sorry ignore me 334
- Moving into own BTL property - allowable costs 286
- Will Ni be payable on the salary I receive abroad ? 283
- SAGE Payroll Data for Import to MS Dynamics AX 268
- Cancelled 211
- Cancelled 182
- property ownership between husband wife three taxpayers 182