A vintage Ferrari was at the centre of attention in a recent tax tribunal case relating to benefits in kind. Giles Mooney and Tim Good from TAXtv examine the implications more closely in June's episode.
At issue was whether the Ferrrari - one of two cars owned by the company - was “made available” to Golding because of his employment and should therefore be tax as a benefit in kind.
Golding argued that it wasn’t because the Ferrari was only used to entertain clients, who drove the car on a race track.
The tribunal agreed. Geraint Jones QC said in his judgement: “If a director or employee does drive or use a vehicle owned by a company, that is not determinative of whether or not that vehicle has been ‘made available’ to him by reason of his employment or directorship. In this appeal I accept Mr Golding's evidence that he made no personal use of this Ferrari motorcar and that it was, at all material times, either being used as a marketing tool ...”
The key factor in tax disputes over company cars and benefit-in-kind cases, is whether the car is “made available” to an employee, says Tim Good.
“For example, say a Jaguar is made available to a company director. It’s parked on their drive, but the director can’t use the car, say because of a six-month driving ban. Under basic benefit-in-kind law the car is still [considered to be] made available to the director.”
Other topics discussed in the June TAXtv episode include:
- An interview with Keith Gordon
- Louise Fernandez v HMRC decision on late filing penalty
- New fines for late PAYE payments
- America’s offshore tax disclosure scheme.
Visit shop@accountingWEB to subscribe to TAXtv. TAXtv's free Budget round-up is also available, in which Tim Good, Giles Mooney and Neil Warren explain the key points of this year's announcements.