Mitigation of disproportionate car benefit charge

Mitigation of disproportionate car benefit charge

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A car with MLP circa £40,000 was argued by the taxpayer to be a pooled car.  It was not.

The private use of the vehicle was relatively minor and a car benefit charge arises that is completely disproportionate to that use.

The company ( though not the director ) was represented throughout by a firm of accountants.  The accountants did not advise

on the pooled car rules, but assumed the directors' interpretation of them was correct.

The Revenue have rejected an approach suggesting a revamp of previous years and debit of the vehicle to loan account.

Any suggestions to reduce this liability or is this very hard cheese?

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By User deleted
15th Oct 2011 18:46

Hard cheese

It's either a pool car, or it is not. On the basis that it has been accepted that it is, actual private use is of no relevance - all that matters is availability.

But did the accountants give best service? Whenever we come across cars in a company that have not been P11'd, the first thing that we discuss with the client are the benefit/pool car rules - unless such advice is specifically excluded in the terms of engagement (which is very rarely the case).

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By dropoutguy
16th Oct 2011 12:49

The engagement letter excluded responsibilty for P11ds - is that the same as excluding advice on pooled cars?

However, the accountants would have needed to take a view on pooled car eligibility in order to get the Class 1A right in the accounts.

But anyway, any suggestions re negotiations with HMRC to get the tax down? Equitable liability? Other? 

 

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